Question

White Supplies' total material costs are $30,000 and total conversion costs are $20,000. Equivalent units of production for materials are 10,000, and 5,000 for conversion costs.
Compute the unit costs for materials, conversion costs, and total manufacturing costs for the month.
COSTS
Unit costs Materials Conversion Costs Total
Costs incurred
Equivalent units
Unit costs

Answer 1

Answer:

                                                Material                      Conversion cost

Cost per unit                        $3 per unit                               $4 per unit

Explanation:

Cost per equivalent  unit is computed by dividing the the total cost of each  expenditure type by its the total total equivalent units.

Equivalent is a notional whole unit which represent incomplete and is used t to apportion cost between work in progress and completed work

The cost per equivalent units= total cost of expenditure type / total equivalent units

                                       Material                      Conversion cost

Total cost                           30,000                           20,000

Equivalent units               10,000                              5,000

Cost per unit                 $30,000/10000                      $20,000/5000

                                   = $3 per unit                               $4 per unit

                                              Material                      Conversion cost

Cost per unit                        $3 per unit                               $4 per unit