Use this information about Department F to answer the questions that follow.

Department F had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. Of the $12,500, $8,000 was for materials and $4,500 was for conversion costs. 14,000 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450, and factory overhead was $18,710.

-If the average cost method is used, the materials cost per unit (rounded to the nearest cent) would be
A) $2.04
B) $1.59
C) $1.91
D) $2.00

Question

Use this information about Department F to answer the questions that follow.

Department F had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. Of the $12,500, $8,000 was for materials and $4,500 was for conversion costs. 14,000 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450, and factory overhead was $18,710.

-If the average cost method is used, the materials cost per unit (rounded to the nearest cent) would be
A) $2.04
B) $1.59
C) $1.91
D) $2.00

Quizplus · Accepted Answer

The average cost method assigns the total cost of materials used to the total number of units produced. In this case, the total cost of materials used is $28,700 + $8,000 = $36,700. The total number of units produced is 15,000 + 3,000 = 18,000. Therefore, the materials cost per unit is $36,700 / 18,000 = $2.04.

Use This Information About Department F to Answer the Questions