3. Alpha Company, on March 1, 2017 has a beginning Work in Process inventory of

Question

3. 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

Equivalent units Physical units Materials Conversion Ending inventory 100000 100000 65000 Total units 100000 100000 65000 Materials Labor Total costs 25000 19500 Equivalent units 100000 65000 Cost per Equivalent unit 0.25 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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