A department adds materials at the beginning of the process and incurs conversio

Question

A department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of July, there was no beginning work in process; 20,000 units were completed and transferred out; and there were 10,000 units in the ending work in process that were 40% complete. During July, $72,000 materials costs and $63,000 conversion costs were charged to the department.
The unit production costs for materials and conversion costs for July was

MATERIALS CONVERSION COSTS
A) 2.40 2.63
B) 3.60 3.15
C) 3.00 2.10
D) 2.40 2.10

Explanation / Answer

20000 + 40% of 10000= 24000 units materials cost = 72000/24000 = 3.0 for conversion costs units = 20000+10000 = 30000 and conversion costs = 63000/30000 = 2.1 option C

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