Bravo-Zulu has the following cost and production data for the Blending departmen
ID: 2599513 • Letter: B
Question
Bravo-Zulu has the following cost and production data for the Blending department for December 2016
Cost data:
Beginning works in process inventory, December 1
Direct Materials $50,000
ConversionCost $26,000
$76,000
Cost incurred during production in December
Direct Materials $430,000
Conversion Cost $136,000
$566,000
Production data
Completed and transferred out 52,000
Ending work in process 8,000
Ending work in process was 100% complete as to materials and 25% complete as to conversion costs.
Instructions:
a. Determine the unit cost for materials
b. Determine the unit cost for conversion
Explanation / Answer
a) Unit cost for materials = Total cost of material/Equivalent unit for material
= (50000+430000)/60000
Unit cost for materials = 8 per unit
b) Unit cost for conversion cost = Total cost of conversion cost/Equivalent unit for conversion cost
= (26000+136000)/54000
Unit cost for conversion cost = 3 per unit
Equivalent unit :
Material = 52000+(8000*100) = 60000 unit
conversion cost = 52000+(8000*25) = 54000 unit