Question

During December, the production department of a process operations system completed and transferred to finished goods a total of 65,000 units of product. At the end of March, 15,000 additional units were in process in the production department and were 80% complete with respect to materials. The beginning inventory included materials cost of $57,500 and the production department incurred direct materials cost of $183,000 during December. Compute the direct materials cost per equivalent unit for the department using the weighted-average method

Answer 1

$3.12

Step-by-step explanation:

EUP and cost per EUP DM

* Completed and transferred 65,000 x 100% = 65,000

* Ending Work in Process

* Direct materials 15,000 x 80% = 12,000

* Equivalent units = 77,000

* Costs of beginning inventory = $57,500

* Costs incurred this period = 183,000

* Total costs = $240,500

* Cost per equivalent unit $240,500 ÷ 77,000 = $3.12

Cheers