Question

The following information is available for Lexi Company for January.

Equivalent Units

Direct materials                      5,000

Conversion Costs                    2,500

Beginning WIP inventory costs

Direct Material                       $30,000

Conversion Costs                    $64,500                      

Costs for the month of January – Current costs

Direct materials                      $40,000

Conversion Costs                    $35,000

Ending Inventory Costs

Direct Materials                      $15,500

Conversion Costs                    $13,500

Complete the cost per equivalent unit for materials, conversion costs and the total cost per equivalent unit.

Answer 1

Solution

	Material	Conversion	Total
Cost per equivalent Unit	$                  14.00	$                 39.80	$                   53.80

Working

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 30,000	$ 64,500	$ 94,500
Cost incurred during period		$ 40,000	$ 35,000	$ 75,000
Total Cost to be accounted for		$ 70,000	$ 99,500	$ 169,500
Total Equivalent Units		5,000	2,500
Cost per Equivalent Units		$                 14.00	$                   39.80	$             53.80