Question

In: Accounting

What is cost per equivalent?

XYZ company uses the weighted-average method in its process costing system. Data for assembly department for April is as follows -

Materials

Work in process, 1 may = $36000

Cost aded during April = $200000

Equivalent units of production = 4000

Calculate the cost per equivalent unit for material?

Expert Solution

Introduction -

Equivalent unit is a cost accounting concept that is used in process costing for calculating costs.

Cost per equivalent unit means beginning work in process plus cost incurred during particular time divided by equivalent units of production.

Solution -

Cost per equivalent unit for material

Formula = (work in process, may 1 + cost added during may) / equivalent units of production

($36000 + $200000) / 4000

$236000 / 4000

$59

Hence cost per equivalent unit for material is $59.

Cost per equivalent unit for material is $59

Ruby answered 2 years ago

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