Question

Idaho Lumber Company grows, harvests, and processes timber for use in construction. The following data pertain to the firm's sawmill during November. $ 86,700 121,000 Work in process, November 1 Direct material Conversion Costs incurred during November Direct material Conversion $382,500 525,000 The equivalent units of activity for November were as follows: 6,800 equivalent units of direct material and 1,700 equivalent units of conversion activity. Required: Calculate the cost per equivalent unit, for both direct material and conversion, during November. Use weighted average process costing. Cost per Equivalent Unit Direct material Conversion

Answer 1

Solution

	Cost per equivalent Unit
Material	$                  69.00
Conversion	$                380.00

Working

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 86,700	$ 121,000	$ 207,700
Cost incurred during period		$ 382,500	$ 525,000	$ 907,500
Total Cost to be accounted for		$ 469,200	$ 646,000	$ 1,115,200
Total Equivalent Units		6,800	1,700
Cost per Equivalent Units		$                 69.00	$                380.00