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26 May, 04:10

EB8.

LO 5.4A production department within a company received materials of $7,000 and conversion costs of $5,000 from the prior department. It added material of $78,400 and conversion costs of $47,000. The equivalent units are 5,000 for material and 4,000 for conversion. What is the unit cost for materials and conversion?

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  1. 26 May, 04:25
    0
    The unit cost for materials and conversion is $17.08 and $13 respectively

    Explanation:

    The computation of per unit cost is shown below:

    For material:

    = (Material cost received + additional material cost) : (equivalent units of material)

    = ($7,000 + $78,400) : (5,000 units)

    = ($85,400) : (5,000 units)

    = $17.08

    For conversion:

    = (Conversion cost received + additional conversion cost) : (equivalent units of conversion

    = ($5,000 + $47,000) : (4,000 units)

    = ($52,000) : (4,000 units)

    = $13
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