Question

The cost of direct materials transferred into the Bottling Department of the Mountain Springs Water Company is $1,098,900. The conversion cost for the period in the Bottling Department is $603,000. The total equivalent units for direct materials and conversion are 33,300 liters and 6,700 liters, respectively. Determine the direct materials and conversion cost per equivalent unit.

Answer 1

direct materials = $33.00

conversion cost = $90.00

Step-by-step explanation:

Cost per equivalent unit = Cost during the period ÷ Equivalent units of Production

The direct materials and conversion cost per equivalent unit.

Direct materials = $1,098,900 ÷ 33,300 liters = $33.00

Conversion cost = $603,000 ÷ 6,700 liters = $90.00