Q.18-9SE - Horngren'S Financial And Managerial Accounting

Question

Question: Refer to the data in Short Exercise S18-8 and your results for equivalent units of production. The Mixing Department of Complete Foods has direct materials costs of \(46,500 and conversion costs of \)23,540 for October.

Compute the cost per equivalent unit of production for direct materials and for

conversion costs.

Step-by-Step Solution

Answer

Answer:

The cost per equivalent unit of production for direct materials is $0.75 and for the conversion cost is $0.55

Step 1: Cost per equivalent unit of production for direct material

$$\begin{gathered} \mathit{C}\mathit{o}\mathit{s}\mathit{t}\mathbf{ }\mathit{p}\mathit{e}\mathit{r}\mathbf{ }\mathit{E}\mathit{U}\mathit{P}\mathbf{ }\mathit{f}\mathit{o}\mathit{r}\mathbf{ }\mathit{d}\mathit{i}\mathit{r}\mathit{e}\mathit{c}\mathit{t}\mathbf{ }\mathit{m}\mathit{a}\mathit{t}\mathit{e}\mathit{r}\mathit{i}\mathit{a}\mathit{l}\mathbf{ }\mathbf{=}\frac{\mathbf{T}\mathbf{o}\mathbf{t}\mathbf{a}\mathbf{l}\mathbf{ }\mathbf{d}\mathbf{i}\mathbf{r}\mathbf{e}\mathbf{c}\mathbf{t}\mathbf{ }\mathbf{M}\mathbf{a}\mathbf{t}\mathbf{e}\mathbf{r}\mathbf{i}\mathbf{a}\mathbf{l}\mathbf{ }\mathbf{cos}\mathbf{t}}{\mathbf{E}\mathbf{q}\mathbf{u}\mathbf{a}\mathbf{l}\mathbf{e}\mathbf{n}\mathbf{t}\mathbf{ }\mathbf{u}\mathbf{n}\mathbf{i}\mathbf{t}\mathbf{ }\mathbf{o}\mathbf{f}\mathbf{ }\mathbf{p}\mathbf{r}\mathbf{o}\mathbf{d}\mathbf{u}\mathbf{c}\mathbf{t}\mathbf{i}\mathbf{o}\mathbf{n}\mathbf{ }\mathbf{d}\mathbf{i}\mathbf{r}\mathbf{e}\mathbf{c}\mathbf{t}\mathbf{ }\mathbf{m}\mathbf{a}\mathbf{t}\mathbf{e}\mathbf{r}\mathbf{i}\mathbf{a}\mathbf{l}} \\ \mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{=}\frac{\mathbf{\$}\mathbf{46}\mathbf{,}\mathbf{500}}{\mathbf{62}\mathbf{,}\mathbf{000}} \\ \mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{=}\mathbf{\$}\mathbf{0}\mathbf{.}\mathbf{75} \end{gathered}$$

Step 2: Cost per equivalent unit of production for conversion cost

$$\begin{gathered} \mathit{C}\mathit{o}\mathit{s}\mathit{t}\mathbf{ }\mathit{p}\mathit{e}\mathit{r}\mathbf{ }\mathit{E}\mathit{U}\mathit{P}\mathbf{ }\mathit{f}\mathit{o}\mathit{r}\mathbf{ }\mathit{c}\mathit{o}\mathit{n}\mathit{v}\mathit{e}\mathit{r}\mathit{s}\mathit{i}\mathit{o}\mathit{n}\mathbf{ }\mathbf{cos}\mathit{t}\mathbf{ }\mathbf{=}\frac{\mathbf{T}\mathbf{o}\mathbf{t}\mathbf{a}\mathbf{l}\mathbf{ }\mathbf{c}\mathbf{o}\mathbf{n}\mathbf{v}\mathbf{e}\mathbf{r}\mathbf{s}\mathbf{i}\mathbf{o}\mathbf{n}\mathbf{ }\mathbf{cos}\mathbf{t}}{\mathbf{E}\mathbf{q}\mathbf{u}\mathbf{a}\mathbf{l}\mathbf{e}\mathbf{n}\mathbf{t}\mathbf{ }\mathbf{u}\mathbf{n}\mathbf{i}\mathbf{t}\mathbf{ }\mathbf{o}\mathbf{f}\mathbf{p}\mathbf{r}\mathbf{o}\mathbf{d}\mathbf{u}\mathbf{c}\mathbf{t}\mathbf{i}\mathbf{o}\mathbf{n}\mathbf{ }\mathbf{f}\mathbf{o}\mathbf{r}\mathbf{ }\mathbf{c}\mathbf{o}\mathbf{n}\mathbf{v}\mathbf{e}\mathbf{r}\mathbf{s}\mathbf{i}\mathbf{o}\mathbf{n}\mathbf{ }\mathbf{cos}\mathbf{t}} \\ \mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{=}\frac{\mathbf{\$}\mathbf{23}\mathbf{,}\mathbf{540}}{\mathbf{42}\mathbf{,}\mathbf{800}} \\ \mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{=}\mathbf{\$}\mathbf{0}\mathbf{.}\mathbf{55} \end{gathered}$$