Question

Nonuniform Inputs

Apeto Company produces premium chocolate candy bars. Conversion costs are added uniformly. For February, EWIP is 30 percent complete with respect to conversion costs. Materials are added at the beginning of the process. The following information is provided for February:

Physical flow schedule:
Units to account for:
Units in BWIP		0
Units started		60,000
Total units to account for		60,000
Units accounted for:
Units completed:
From BWIP	0
Started and completed	50,000	50,000
Units in EWIP		10,000
Total units accounted for		60,000

Inputs
Direct Materials	Conversion Costs
$24,000	$63,600

Required:

1. Calculate the equivalent units for each input category.

	Equivalent Units
Direct Materials
Conversion

2. Calculate the unit cost for each category and in total. If required, round your answers to the nearest cent.

Unit direct materials cost	$
Unit conversion cost	$
Total unit cost	$

3. What if a different type of materials is also added at the end of the process (a candy wrapper), costing $7,500? Calculate the new unit cost. If required, round your answer to the nearest cent.
$ per unit

Answer 1

New unit cost = Cost of new material / Equivalent units

Equivalent units = Units completed + (Ending inventory x percentage completed)