Packaging Department in August? LDR Manufacturing produces a pesticide chemical

Question

Packaging Department in August? LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments - Mixing, Refining, and Packaging. On January 1. 2014, the first department, Mixing, had no beginning inventory. During January, 40,000 fl. oz. of chemicals were Start production. Of these, 32,000 fl. oz. were completed and 8,000 fl. oz. remained in process. In the Mixing Department, all direct materials are added at the beginning of the production process an costs are applied evenly through the process. At the end of the month, LDR calculated equivalent units in the Mixing Department as show n below: % of completion for direct materials costs: 100% % of completion for conversion costs: 60% During January, the Mixing Department incurred $48,000 in direct materials costs and $211,600 in conversion costs. How much was the cost per equivalent unit for materials and for conversion costs? (Use the weighted average method and round your answer to the nearest cent)

Explanation / Answer

Correct answer is D.

Direct material cost in the mixing department $ 48,000.00 Equivalent units for direct material      40,000.00 Cost per unit of materials $          1.20 Total conversion cost $211,600.00 Conversion units      36,800.00 Conversion cost per unit $          5.75

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