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19 August, 16:12

Buckman Company uses the weighted average method for process costing. The cost per equivalent unit for direct materials is $5.00. The cost per equivalent unit for conversion costs is $3.00. The company completed and transferred out is 40,000 units. The equivalent units of ending work-in-process for materials is an additional 3,000 units, for conversion is an additional 2,000 units. What is the total cost accounting for direct materials?

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  1. 19 August, 16:34
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    The total cost accounting for direct materials is $215,000

    Explanation:

    The computation of the total cost accounted for the direct material is shown below:

    = (cost per equivalent unit for direct materials * transferred units) + (ending work in progress units * cost per equivalent unit for direct materials)

    = ($5 * 40,000) + (3,000 * $5)

    = $200,000 + $15,000

    = $215,000

    The conversion cost units and its cost per equivalent unit are not relevant. Hence, it is ignored in the computation part.
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