Question

Knowledge Check 01 The cost of the beginning work in process inventory was comprised of $3,000 of direct materials, $10,000 of direct labor, and $10,000 of factory overhead. Costs incurred during the period were comprised of $15,000 of direct materials costs, and $100,000 of conversion costs. The equivalent units of production (EUP) for the period were 9,000 for direct materials and 6,000 for conversion The costs per EUP were: O $0.33 per EUP for direct materials and $3.34 per EUP for conversion O $1.67 per EUP for direct materials and $9.43 per EUP for conversion. O $1.10 per EUP O $2.00 per EUP for direct materials and $20.00 per EUP for conversion.

Answer 1

The cost per EUP were :

Answer : $ 2 .00 EUP for Direct materials and $ 20.00 per EUP for conversion.

Explanation

	Direct Material	Conversion
Cost of beginning WIP	$ 3000	$ 20000
Add : Cost incurred during the period	$ 15000	$ 100000
Total cost (a)	$ 18000	$ 120000
Equivalent unit (b)	9000	6000
cost per EUP (a) / (b)	$ 2.00	$ 20.00

Working note -1

Beginnig Conversion cost = Direct labor + Factory overhead

= $ 10000 + $ 10000 = $ 20000