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Patel Company uses a manufacturing process that has two distinct stages: P1 and P2. Raw material is consumed in P1 at the beg

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Answer #1

Part a.) Calculation of Direct Material cost per unit of output

Direct Material cost per unit

=Direct material cost/ Output units

=100000/10000= 10 per unit

Part b) Calculation of Conversion cost per unit

Conversion cost = Direct Labor + Manufacturing overheads

P1 P2
Direct labor 80000 160000
Equipment maintenance 20000 40000
Plant depreciation 40000 60000
Conversion costs 140000 260000
Output 10000 10000
Conversion cost per unit 14 26
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