Question

The company uses the​ weighted-average method in its process costing system. The Packaging Department started the month with 210 units in​ process, started 1,470 ​units, and had 100 units in process at the end of the period. All materials are added at the beginning of the​ process, and conversion costs are incurred uniformly. The units in process at the end of the month are 30​% complete with respect to conversion costs. During the month 1 comma 580 units were completed and transferred out. The department incurred the following​ costs: For conversion​ costs, the equivalent units of production are

Beginning WIP Added this month Total
Direct Materials $700 $3,400 $4,100
Conversion Costs 300 6,150 6,450
Total $1,000 $9,550 $10,550
The cost per equivalent unit for direct materials is? (Round your answer to two decimal places.)
a. $2.56
b. $7.30
c. $5.93
d. $2.30

Answer 1

$2.44

Explanation:

For computation of cost per equivalent unit for direct materials we need to find out first units transferred out and equivalent unit of material which is shown below:-

Units transferred out = Units process + Started Units - Closing units

= 210 + 1,470 - 100

= 1,680 - 100

= 1,580

Equivalent unit of material = Units transferred out + Closing units

= 1,580 + 100

= 1,680

Cost per equivalent unit of material = Total of direct materials ÷ Equivalent unit of material

= $4,100 ÷ 1,680

= $2.44

This is the answer and the same is not provided in the given options.