costs per equivalent unit

amon products inc. completed and transferred 120,000 particle board units of production from the pressing department. there was no beginning inventory in process in the department. the ending in-process inventory was 7,500 units, which were $\frac{2}{5}$ complete as to conversion cost. all materials are added at the beginning of the process. direct materials cost incurred was $\$61,200$, direct labor cost incurred was $\$127,150$, and factory overhead applied was $\$221,450$.

determine the following for the pressing department. round \cost per equivalent unit\ answers to the nearest cent.

a. total conversion cost
b. conversion cost per equivalent unit
c. direct materials cost per equivalent unit

Question

costs per equivalent unit

amon products inc. completed and transferred 120,000 particle board units of production from the pressing department. there was no beginning inventory in process in the department. the ending in-process inventory was 7,500 units, which were $\frac{2}{5}$ complete as to conversion cost. all materials are added at the beginning of the process. direct materials cost incurred was $\$61,200$, direct labor cost incurred was $\$127,150$, and factory overhead applied was $\$221,450$.

determine the following for the pressing department. round \cost per equivalent unit\ answers to the nearest cent.

a. total conversion cost
b. conversion cost per equivalent unit
c. direct materials cost per equivalent unit

Accepted Answer

{ "quality": "clear", "question_count": 1, "skills_matched": [ "step_cot", "blank_filling_formatter", "explain_then_answer", "tutor", "mastery_adaptive_brevity" ], "needs_drawing": false, "concepts_used": [ "Equivalent Units", "Process Costing" ], "new_concepts": [], "current_concepts": [ "Equivalent Units", "Process Costing", "Conversion Cost", "Direct Materials Cost" ] } ## Calculate total conversion cost Using the *Process Costing* knowledge point $$ \begin{aligned} \text{Total Conversion Cost} &= \text{Direct Labor Cost} + \text{Factory Overhead Applied} \ &= \$127,150 + \$221,450 \ &= \$348,600 \end{aligned} $$ ## Determine equivalent units of production for conversion Using the *Equivalent Units* knowledge point $$ \begin{aligned} \text{Units completed and transferred} &= 120,000 \ \text{Equivalent units in ending inventory} &= 7,500 \times \frac{2}{5} = 3,000 \ \text{Total Equivalent Units for Conversion} &= 120,000 + 3,000 = 123,000 \end{aligned} $$ ## Calculate conversion cost per equivalent unit Using the *Equivalent Units* and *Process Costing* knowledge points $$ \begin{aligned} \text{Conversion Cost per Equivalent Unit} &= \frac{\text{Total Conversion Cost}}{\text{Total Equivalent Units for Conversion}} \ &= \frac{\$348,600}{123,000} \ &\approx \$2.8341 \approx \$2.83 \end{aligned} $$ ## Determine equivalent units of production for direct materials Using the *Equivalent Units* knowledge point $$ \begin{aligned} \text{Units completed and transferred} &= 120,000 \ \text{Equivalent units in ending inventory (100\% complete)} &= 7,500 \times 100\% = 7,500 \ \text{Total Equivalent Units for Direct Materials} &= 120,000 + 7,500 = 127,500 \end{aligned} $$ ## Calculate direct materials cost per equivalent unit Using the *Equivalent Units* and *Process Costing* knowledge points $$ \begin{aligned} \text{Direct Materials Cost per Equivalent Unit} &= \frac{\text{Direct Materials Cost}}{\text{Total Equivalent Units for Direct Materials}} \ &= \frac{\$61,200}{127,500} \ &= \$0.48 \end{aligned} $$ Determine the following for the Pressing Department. Round "cost per equivalent unit" answers to the nearest cent. a. Total conversion cost: \$348,600 b. Conversion cost per equivalent unit: \$2.83 c. Direct materials cost per equivalent unit: \$0.48 { "subject": "Business", "question_type": "Fill-in-the-blank", "knowledge_point": [ "Business", "Accounting", "Process Costing" ] }

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Question

Explanation:

Calculate total conversion cost

Determine equivalent units of production for conversion

Calculate conversion cost per equivalent unit

Determine equivalent units of production for direct materials

Calculate direct materials cost per equivalent unit

Answer: