Use this information about the Assembly Department to answer the questions that follow.
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The debits to Work in Process-Assembly Department for April, together with data concerning production, are as follows:
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All direct materials are placed in process at the beginning of the process, and the average cost method is used to cost inventories.
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-The materials cost per equivalent unit (rounded to the nearest cent) for April is
A) $2.60
B) $2.81
C) $3.02
D) $2.26

Question

Use this information about the Assembly Department to answer the questions that follow.
?
The debits to Work in Process-Assembly Department for April, together with data concerning production, are as follows:
?
  All direct materials are placed in process at the beginning of the process, and the average cost method is used to cost inventories.
?
-The materials cost per equivalent unit (rounded to the nearest cent) for April is
A) $2.60 
B) $2.81 
C) $3.02 
D) $2.26

Quizplus · Accepted Answer

To calculate the materials cost per equivalent unit, we need to divide the total materials cost by the equivalent units of production. The total materials cost is the sum of the direct materials debited to the Assembly Department ($22,880) and the ending materials inventory (10,080 x 30% x $2.80 = $8,064). The equivalent units of production is the sum of the units completed (8,000) and the units in ending inventory (2,880 x 30% = 864). Therefore:

Materials cost per equivalent unit = ($22,880 + $8,064) / (8,000 + 864) = $30,944 / 8,864 = $2.81 (rounded to the nearest cent)

Use This Information About the Assembly Department to Answer the Questions