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30 August, 14:01

The debits to Work in Process-Assembly Department for May, together with data concerning production, are as follows: May 1, work in process: Materials cost, 3,000 units $ 8,000 Conversion costs, 3,000 units, 66.7% completed 6,000 Materials added during May, 10,000 units 30,000 Conversion costs during May 31,000 Goods finished during May, 11,500 units 0 May 31 work in process, 1,500 units, 50% completed 0 All direct materials are placed in process at the beginning of the process and the first-in, first-out method is used to cost inventories. The materials cost per equivalent unit for May is

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  1. 30 August, 14:14
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    The materials cost per equivalent unit for May is $3

    Explanation:

    The computation of the materials cost per equivalent unit is shown below:

    = Total cost : number of equivalent units

    where,

    Number of equivalent units = Opening work in progress units * completion units + added units * completion units + ending work in progress units * completion units

    = 3,000 units * 100% + 8,500 units * 100% + 1,500 units * 100%

    = 3,000 units + 8,500 units + 1,500 units

    = 10,000 units

    and, the material cost is $30,000

    Now put these values to the above formula

    So, the cost per unit would equal to

    = $30,000 : 10,000 units

    = $3

    The material added = Finished goods units - opening work in progress units

    = 11,500 units - 3,000 units

    = 8,500 units
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