The Made Rite Shoe Corporation uses a process costing system. In the Cutting Department, 4,000 units were started and by the end of the period, all but 400 units had been completed. The 400 units were 80% complete regarding materials and 40% complete regarding conversion costs. Costs added during the current period include $66,640 for materials and $70,312 for conversion. What was the cost perequivalent unit of production for direct materials?
A) $16.67
B) $18.51
C) $17.00
D) $18.11

Question

Quizplus · Accepted Answer

The equivalent units for materials are 4,320 (4,000 completed + 400 * 80%). The cost per equivalent unit for materials is $66,640 / 4,320 = $15.42.

The Made Rite Shoe Corporation Uses a Process Costing System