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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 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

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Answer #1

1. The cost per equivalent unit of direct material = total cost of direct material/total unit

= $24000/100000

= $0.24.

So cost per equivalent unit of direct material = $0.24.

2. The cost per equivalent unit of conversion = Total conversion cost/ total unit produced at the end.

= $16000/(100000*80%)

Because 80% of 100000 goods are produced in end.

= $0.20

So cost per equivalent unit of conversion = $0.20.

  

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