eBook Show MewCalculator Analyzing changes in unit costs The costs of materials

Question

eBook Show MewCalculator Analyzing changes in unit costs The costs of materials consumed in producing good units in the Forming Department of Thomas Company were $76,000 and $77,350 for September and October, respectively. The number of equivalent units produced in September and October was 800 tons and 850 tons respectively. Evaluate the change in the cost of materials between the two months. Material cost per ton, September Material cost per ton, October The cost of materials decreasedby per ton between September and October. t2o18

Explanation / Answer

September October

Cost of Materials consumed $76,000 $77350

Units produced (in tons) 800 850

Cost of Material Consumed per ton $76000/800= $95 $77350/850= $91

Material Cost Per Ton September $95

Material Cost Per Ton October $91

Cost of Material decreased by ($95-$91) $4 per ton between September and October

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