Answer:
Cost per material= $9
Cost per conversion = $8.51 unit
Explanation:
We would assume the company uses weighted average method of valuation.
Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required is done in the period under consideration. So there is no separation of the completed units into opening inventory and fully worked.
Cost per Equivalent unit= Total cost / Equivalent unit
Completed units = transferred in + opening inventory -closing inventory
= 40,000 + 10,000 - 5,000 =45,000 units
Equivalent unit of material = (100%× 45,000) + (100%× 5000)= 50,000
Cost per material = $450,000/50,000= $9
Equivalent unit of Conversion cost =(100%× 45,000) + (40%× 5000)= 47,000
Cost per conversion cost = $400,000/ 47,000 units
= $8.51 unit
Cost per material= $9
Cost per conversion = $8.51 unit
