Question

Buckman Company uses the weighted average method for process costing. The cost per equivalent unit for direct materials is $5.00. The cost per equivalent unit for conversion costs is $3.00. The company completed and transferred out is 40,000 units. The equivalent units of ending work-in-process for materials is an additional 3,000 units, for conversion is an additional 2,000 units. What is the total cost accounting for direct materials?

Answer 1

The total cost accounting for direct materials is $215,000

Step-by-step explanation:

The computation of the total cost accounted for the direct material is shown below:

= (cost per equivalent unit for direct materials × transferred units) + (ending work in progress units × cost per equivalent unit for direct materials)

= ($5 × 40,000) + (3,000 ×$5)

= $200,000 + $15,000

= $215,000

The conversion cost units and its cost per equivalent unit are not relevant. Hence, it is ignored in the computation part.