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Pullian Company mares a variety of chemicals. Its Mixing Department reports the following information for May of the current year:
Units:
Started and completed 8,000
Unfinished units* 2,500
*100% complete for direct materials and 30% complete for conversion
Costs incurred during the current period
Direct materials $110,040
Direct labor $551,000
Manufacturing overhead $79,750
Compute the cost per equivalent unit for direct materials and conversion
Explanation / Answer
total completed units are 5500 and for those the material usage is $220,040 and the labor use is $551,000 and manufacturing over head is $79,500
the total cost is = $740,790
then unit cost = $740,790/5500
= $134.7 per unit, it is included both material and conversion costs.
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