Question

The costs of materials consumed in producing good units in the Forming Department of Thomas Company were $76,000 and $77,350 for September and October, respectively. The number of equivalent units produced in September and October was 800 tons and 850 tons, respectively. Evaluate the change in the cost of materials between the two month

Answer 1

Answer and Explanation:

The computation of the evaluation of change in the cost of materials between the two month is given below;

The Cost per unit in September is

= 76,000 ÷ 800

= $95 per unit

And,

Cost per unit in October = $77,350 ÷ 850

= $91 per unit

Now

Cost per unit of materials has been decreased in October by $4 per unit or instead of is by

= (4 ÷ 95 × 100)

= 4.21% .