Exercise 18-10 Costs per Equivalent Unit Pacific Products Inc. completed and tra

Question

Exercise 18-10
Costs per Equivalent Unit
Pacific Products Inc. completed and transferred 55,000 particle board units of production from the Pressing Department. There was no beginning inventory in process in the department. The ending in-process inventory was 1,400 units, which were 3/5 complete as to conversion cost. All materials are added at the beginning of the process. Direct materials cost incurred was $203,040, direct labor cost incurred was $38,900, and factory overhead applied was $28,108.
Determine the following for the Pressing Department. Round "cost per equivalent unit" answers to the nearest cent.
a. Total conversion cost $
b. Conversion cost per equivalent unit $
c. Direct materials cost per equivalent unit $

Explanation / Answer

answer and explanation for C: "All materials are added at the beginning of the process." -- This is the key. It means that they are 100% complete with respect to direct materials. Ending inventory = 1,400 units completed and transferrfed = 55,000 units total = 56,400 physical units since 100% complete for direct materials, 56,400 equivalent units. 203,040/56,400 = $3.60 per equivalent unit

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