Question 3 (14 points) Alpha Company, on March 1, 2017 has a beginning Work in P

Question

Question 3 (14 points) Alpha Company, on March 1, 2017 has a beginning Work in Process inventory of zero. All materials are added into production at the beginning of its production. There is only one production WIP inventory. During the month 100,000 units were started. At the end of the month all started units were 65% complete with respect to conversion, Direct Materials placed into production had a total cost of $25,000 and the total conversion cost for the month was $19,500. Alpha uses the weighted-average process costing method. Use this information to determine for the month of March: (Round & enter final answers to the nearest penny.) 1. the cost per equivalent unit of direct material 2. the cost per equivalent unit of conversion

Explanation / Answer

working:

since direct materials are added at the beginnning of its production,

so equivalent units for materials will be 100% of units started

=>100% *100,000 =>100,000 units is equivalen units for materials.

cost per equivalent of material = cost / equivalent units

=>$25,000 / 100,000

=>$0.25.

now,

equivalent units of conversion = units started * percentage completion

=>100,000*65% =>65,000.

cost per equivalent = $19,500 / 65,000 units

=>$0.30.

1.cost per equivalent unit of direct material $0.25 2.cost per equivalent unit of conversion $0.30

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