Cost per Equivalent------I am really struggling with this! Georgia Products Inc.

Question

Cost per Equivalent------I am really struggling with this! Georgia Products Inc. completed and transferred 180,000 particle board units of production from the Pressing Department. There was no beginning inventory in process in the department. The ending in-process inventorywas 15,000 units, which were 1/2 completed as to conversion cost. All materials are added at the beginning of the process. Direct materials cost incurred was $604,500, direct labor cost incurred was $99,500, and factory overhead applied was $23,350. Determine the following for the Pressing Department: 1.Total conversion costs 2.Conversion cost per equivalent unit 3.Direct materials cost per equivalent unit

Explanation / Answer

Hi, Please find the answer as follows: Total Conversion Cost = 99500+23350 =122850 Equivalent Unit = Conversion Cost = 180000 + 15000*1/2 = 187500 CC per unit = 122850 / 187500 = .6552 or .66 DM per unit - 604500 /180000+15000 = 3.10 Thanks, Aman

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