Alpha Company, on March 1, 2017 has a beginning Work in Process inventory of zero. All materials are added into production at the beginning of its production. There is only one production WIP inventory. During the month 100,000 units were started. At the end of the month all started units were 80% complete with respect to conversion. Direct Materials placed into production had a total cost of $24,000 and the total conversion cost for the month was $16,000. Alpha uses the weighted-average process costing method. Use this information to determine for the month of March: (Round & enter final answers to the nearest penny.)
1. the cost per equivalent unit of direct material
2. the cost per equivalent unit of conversion
| 1 | EU cost per unit direct material | $0.24 |
| 2 | EU cost per unit conversion cost | $0.20 |
Explanation:
in this problem there was no finished goods inventory all started were still in production at the end of the period.
Step 1: Computing equivalent units:
| Equivalent units schedule | ||
| Item | Material | Conversion |
| Ending WIP @ 100% complete for MC | 100,000 | |
| Ending WIP @ 80% complete for CC | 80,000 | |
| Totals | 100,000 | 80,000 |
Step 2: Computing cost per unit for the month of activity:
| Unit cost calculation schedule | |||
| Item | Total costs | Equivalent units | Per unit cost |
| Material costs | $24,000 | 100,000 | $0.24 |
| Conversion costs | $16,000 | 80,000 | $0.20 |
| Totals | $40,000 | $0.44 |
Explanation:
Material cost per unit = Total material cost / Equivalent units =$24,000 / 100,000 = $0.24
Conversion cost per unit = Total Conversion cost / Equivalent units = $16,000/80,000 = $0.20
Alpha Company, on March 1, 2017 has a beginning Work in Process inventory of zero. All...
Alpha Company, on March 1, 2017 has a beginning Work in Process inventory of zero. All materials are added into production at the beginning of its production. There is only one production WIP inventory. During the month 100,000 units were started. At the end of the month all started units were 80% complete with respect to conversion. Direct Materials placed into production had a total cost of $24,000 and the total conversion cost for the month was $16,000. Alpha uses...
Alpha Company, on March 1, 2017 has a beginning Work in Process inventory of zero. All materials are added into production at the beginning of its production. There is only one production WIP inventory. During the month 100,000 units were started. At the end of the month all started units were 80% complete with respect to conversion. Direct Materials placed into production had a total cost of $24,000 and the total conversion cost for the month was $16,000. Alpha uses...
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