The debits to Work in Process-Assembly Department for May, together with data concerning production, are as follows: May 1, work in process:
Materials cost, 3,000 units $ 8,000
Conversion costs, 3,000 units, 66.7% completed 6,000
Materials added during May, 10,000 units 30,000
Conversion costs during May 31,000
Goods finished during May, 11,500 units 0
May 31 work in process, 1,500 units, 50% completed 0
All direct materials are placed in process at the beginning of the process and the firstin, firstout method is used to cost inventories.The materials cost per equivalent unit for May is
A)$3.00
B)$3.80
C)$2.92
D)$2.31

Question

The debits to Work in Process-Assembly Department for May, together with data concerning production, are as follows: May 1, work in process:
Materials cost, 3,000 units $ 8,000
Conversion costs, 3,000 units, 66.7% completed 6,000
Materials added during May, 10,000 units 30,000
Conversion costs during May 31,000
Goods finished during May, 11,500 units 0
May 31 work in process, 1,500 units, 50% completed 0
All direct materials are placed in process at the beginning of the process and the first­in, first­out method is used to cost inventories.The materials cost per equivalent unit for May is
A)$3.00
B)$3.80
C)$2.92
D)$2.31

Quizplus · Accepted Answer

The materials cost per equivalent unit is calculated by dividing the total materials cost added during May by the equivalent units of production for materials. Since all materials are added at the beginning, the equivalent units for materials are the units started and completed plus the ending work in process. Equivalent units = 10,000 (started) + 1,500 (ending WIP) = 11,500. Materials cost per equivalent unit = $30,000 / 10,000 = $3.00.

The Debits to Work in Process-Assembly Department for May, Together