Question

On March 1, 2019, Annapolis Company has a beginning Work in Process inventory of zero. All materials (100%) are added into production at the beginning of its production. During the month 21,000 units were started. At the end of the month all started units were 65% complete with respect to conversion. Direct Materials placed into production had a total cost of $415,000 and the total conversion cost for the month was $473,000. Annapolis uses the weighted-average process costing method. Use this information to determine the cost per equivalent unit of direct material for the month of March. (Round answer to the nearest cent.) Hint: For this question, the total equivalent units for material is the same as the number of units started.

Answer 1

Beginning work in process is 0.

During the month, 21000 units were started.

All started units were 65% complete with respect to conversion. It means with material, these are 100% complete.

So, Equivalent units of direct material = 100%*Units added in production

=100% * 21000

- 21000

Total direct material cost = $415,000

Cost per equivalent unit of direct material = Direct material cost / equivalent units of material

= 415000/21000

=19.76190476

So, cost per equivalent unit of direct material is 19.76.

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