Timekeeper Inc.manufactures clocks on a highly automated assembly line.Its costing system uses two cost categories,direct materials and conversion costs.Each product must pass through the Assembly Department and the Testing Department.Direct materials are added at the beginning of the production process.Conversion costs are allocated evenly throughout production.Timekeeper Inc.uses weighted-average costing.
Data for the Assembly Department for June 2017 are:

Costs for June 2017:

What is the direct materials cost per equivalent unit during June?
A)$679.51
B)$519.40
C)$504.71
D)$409.86

Question

Timekeeper Inc.manufactures clocks on a highly automated assembly line.Its costing system uses two cost categories,direct materials and conversion costs.Each product must pass through the Assembly Department and the Testing Department.Direct materials are added at the beginning of the production process.Conversion costs are allocated evenly throughout production.Timekeeper Inc.uses weighted-average costing.
Data for the Assembly Department for June 2017 are:

Costs for June 2017:

What is the direct materials cost per equivalent unit during June?
A)$679.51 
B)$519.40 
C)$504.71 
D)$409.86

Quizplus · Accepted Answer

11ea8a5a_a08e_9565_a19c_7d12da8ae4c7_TB5540_00_TB5540_00_TB5540_00 Total cost of direct materials = $94,000 + $602,500 = $696,500
Direct material cost per equivalent unit = $696,500 / 1380.0 units = $504.71