Question

The cost of direct materials transferred into the Rolling Department of Kraus Company is $3,000,000. The conversion cost for the period in the Rolling Department is $462,600. The total equivalent units for direct materials and conversion are 4,000 tons and 3,855 tons respectively. Determine the direct materials and conversion costs per equivalent unit.

Answer 1

Answer:

the direct material & conversion cost per equivalent unit is $750 per ton and $120 per ton

Explanation:

The calculation of the direct material & conversion cost per equivalent unit is given below:

Direct materials per equivalent unit is

= $3,000,000 ÷ 4,000 tons

= $750 per ton

And,  

Conversion costs per equivalent unit is

= $462,600 ÷ 3,855 tons

= $120 per ton

Hence, the direct material & conversion cost per equivalent unit is $750 per ton and $120 per ton