Question

PC Company uses the weighted-average method in its process costing system, in which all materials are added at the beginning of the process, and conversion costs are incurred uniformly. The Painting Department started the month with 800 units in a process that was 40% complete, transferred 2,500 units to Finished Goods Inventory, and had 500 units in process at the end of the period, 70% complete. The amount of direct materials cost in beginning inventory was $16,320, and the amount of direct materials cost added this period totaled $121,440.

What is the direct material cost per equivalent unit?
a. $45.92 per equivalent unit
b. $48 per equivalent unit
c. $48.34 per equivalent unit
d. $55.20 per equivalent unit

Answer 1

a. $45.92 per equivalent unit

Step-by-step explanation:

Calculation for direct material cost per equivalent unit

First step is to calculate the Total units

Total units = 2,500 + 500 - 800

Total units = 2,200

Now let calculate direct material cost per equivalent unit

Direct material cost per equivalent unit=($16,320+$121,440)/(2,200+$800)

Direct material cost per equivalent unit=$137,760/3,000

Direct material cost per equivalent unit=$45.92 per equivalent unit

Therefore the Direct material cost per equivalent unit will be $45.92 per equivalent unit