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7 January, 11:52

At Trapeze Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include:WIP beginning (50% for conversion) 26,200 unitsUnits started 127,500 unitsUnits completed and transferred out 110,700 unitsWIP ending (60% for conversion) 43,000 unitsBeginning WIP direct materials $34,000Beginning WIP conversion costs $22,500Costs of materials added $390,100Costs of conversion added $271,125What is the cost per equivalent unit for direct materials?

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  1. 7 January, 13:24
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    the cost per equivalent unit for direct materials is $2.76

    Explanation:

    First Determine the Total Equivalent Units for Direct Materials.

    Note : direct materials are added at the beginning of the process

    Units completed and transferred out ( 110,700*100%) = 110,700

    Ending Work - In - Process ( 43,000*100%) = 43,000

    Total = 153,700

    Next determine the Total Cost of Direct Materials Incurred during the period.

    Opening Work - In - Process = $34,000

    Added During the year = $390,100

    Total = $424,100

    Then determine the cost per equivalent unit for direct materials

    Cost per equivalent unit = Total Cost of Direct Materials/Total Equivalent Units for Direct Materials

    = $424,100 / 153,700

    = $2.76
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