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 (to the nearest cent) for April is:
A) $2.60
B) $2.81
C) $3.02
D) $2.26

Question

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 (to the nearest cent) for April is:
A) $2.60 
B) $2.81 
C) $3.02 
D) $2.26

Quizplus · Accepted Answer

To determine the materials cost per equivalent unit, we need to calculate the total materials cost and divide it by the total equivalent units of production. 
Given data: 
Debits to Work in Process-Assembly Department = $62,210 
Total equivalent units produced = 23,500 
Direct materials are placed at the beginning of the process 
Using the average cost method, we can find the cost per equivalent unit. 
Total materials cost = debits to WIP - (cost of ending WIP) 
Cost of ending WIP = (6,200 units x $3.05 per unit) = $18,910 
Total materials cost = $62,210 - $18,910 = $43,300 
Materials cost per equivalent unit = Total materials cost / Total equivalent units produced 
Materials cost per equivalent unit = $43,300 / 23,500 = $2.81 (rounded to the nearest cent)

Therefore, the best choice is B.

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