Question

The cost of direct materials transferred into the Rolling Department of Kraus Company is $588,000. The conversion cost for the period in the Rolling Department is $296,400. The total equivalent units for direct materials and conversion are 3,000 tons and 5,200 tons, respectively. Determine the direct materials and conversion costs per equivalent unit. Direct materials cost per equivalent unit: $ per ton Conversion cost per equivalent unit: $ per ton

Answer 1

• Direct materials cost per equivalent unit: $196 per ton

• Conversion cost per equivalent unit: $57 per ton

Step-by-step explanation:

Direct material cost per equivalent unit = Cost of direct materials transferred in/ Equivalent units for direct materials

= 588,000/3,000

= $196 per ton

Conversion Cost per equivalent unit = Conversion cost for the period / Conversion cost per equivalent

= 296,400/5,200

= $57 per ton