Question

# Cost per Equivalent Unit The cost of direct materials transferred into the Rolling Department of Kraus...

Cost per Equivalent Unit

The cost of direct materials transferred into the Rolling Department of Kraus Company is \$451,200. The conversion cost for the period in the Rolling Department is \$289,750. The total equivalent units for direct materials and conversion are 2,400 tons and 4,750 tons, respectively.

Determine the direct materials and conversion costs per equivalent unit.

 Direct materials cost per equivalent unit: \$ per ton Conversion cost per equivalent unit:

Cost of Units Transferred Out and Ending Work in Process

The costs per equivalent unit of direct materials and conversion in the Rolling Department of Kraus Steel Company are \$0.85 and \$2.95, respectively. The equivalent units to be assigned costs are as follows:

 Equivalent Units Direct Materials Conversion Inventory in process, October 1 0 5,000 Started and completed during October 63,000 63,000 Transferred out of Rolling (completed) 63,000 68,000 Inventory in process, October 31 5,000 1,500 Total units to be assigned costs 68,000 69,500

The beginning work in process inventory on October 1 had a cost of \$3,000. Determine the cost of completed and transferred-out production, the ending work in process inventory, and the total costs assigned by the Rolling Department.

 Completed and transferred-out production \$ Inventory in process, October 31 \$ Total costs assigned by the Rolling Department \$

 1 Direct materials cost per equivalent unit 188 =451200/2400 Conversion cost per equivalent unit 61 =289750/4750
 2 Completed and transferred-out production 257150 Inventory in process, October 31 8675 Total costs assigned by the Rolling Department 265825
 Workings: Direct materials Conversion Total Beginning work in process inventory 3000 To complete Inventory in process, October 1 0 14750 14750 =5000*2.95 Cost of units Started and completed 53550 185850 239400 Completed and transferred-out production 257150 Direct materials Conversion Total Inventory in process, October 31 5000 1500 X Costs per equivalent unit 0.85 2.95 Inventory in process, October 31 4250 4425 8675

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