Cost per equivalent unit in the Blending Department in July is used to determine the cost of the
A)July 1 Work in Process inventory for the Blending Department.
B)Materials added to production in the Blending Department in July.
C)July 31 Work in Process inventory in the Blending Department.
D)Total costs added in the Blending Department during July.

Question

Quizplus · Accepted Answer

Cost per equivalent unit in the Blending Department is used to determine the cost of July 31 Work in Process inventory in the Blending Department. This calculation is necessary to determine the value of the inventory that has not yet been completed at the end of the month. The cost per equivalent unit considers both the direct costs and the overhead costs that have been incurred up to that point, and is used to allocate those costs to the units that are partially completed at the end of the month.

Cost Per Equivalent Unit in the Blending Department in July