At Trapeze Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include:WIP beginning (50% for conversion) 26,200 unitsUnits started 127,500 unitsUnits completed and transferred out 110,700 unitsWIP ending (60% for conversion) 43,000 unitsBeginning WIP direct materials $34,000Beginning WIP conversion costs $22,500Costs of materials added $390,100Costs of conversion added $271,125What is the cost per equivalent unit for direct materials?

Question

Business

Nikolai Mcguire

27 March, 23:22

At Trapeze Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include:WIP beginning (50% for conversion) 26,200 unitsUnits started 127,500 unitsUnits completed and transferred out 110,700 unitsWIP ending (60% for conversion) 43,000 unitsBeginning WIP direct materials $34,000Beginning WIP conversion costs $22,500Costs of materials added $390,100Costs of conversion added $271,125What is the cost per equivalent unit for direct materials?

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Answers (1)

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Lauryn Jordan · Answer 1

the cost per equivalent unit for direct materials is $2.76

Explanation:

First Determine the Total Equivalent Units for Direct Materials.

Note : direct materials are added at the beginning of the process

Units completed and transferred out ( 110,700*100%) = 110,700

Ending Work - In - Process ( 43,000*100%) = 43,000

Total = 153,700

Next determine the Total Cost of Direct Materials Incurred during the period.

Opening Work - In - Process = $34,000

Added During the year = $390,100

Total = $424,100

Then determine the cost per equivalent unit for direct materials

Cost per equivalent unit = Total Cost of Direct Materials/Total Equivalent Units for Direct Materials

= $424,100 / 153,700

= $2.76