Question

Information for Cooper’s Manufacturing Company for the month of May is as follows:

Beginning work in process:	Cost of inventory at process, May 1	$5,000
Units, 600
Direct materials, 100% complete
Conversion costs, 80% complete

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Units started in May, 14,000	Costs charged to Work in Process during May:
Ending work in process inventory:	Direct materials costs, $42,400
Units, 1,600	Direct labor costs, $20,049
Direct materials, 100% complete	Factory overhead costs, $52,400
Conversion costs, 30% complete

What is the equivalent cost per unit for materials for the month of May?

What is the equivalent cost per unit for conversion costs for the month of May?

Equivalent Units

Units                Materials                      Conversion                   Total

Beginning Inventory

            % complete

Started & Finished

Ending Inventory

            % complete

Total

Answer 1

STEP 1
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	600	100%	80%	0%	20%
Units introduced	14,000
Total units to be accounted for	14,600
Completed and Transferred unit	13,000	0%	0%	100%	100%
Ending WIP	1,600	0%	0%	100%	30%

STEP 2
Equivalent Units
	Total Units	Materials		Conversion Cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	600	0%	-	20%	120
From units started/Introduced	12,400	100%	12,400	100%	12,400
Total	13,000		12,400		12,520
	Total Units	Materials		Conversion Cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	1,600	100%	1,600	30%	480
Total EUP	14,600		14,000		13,000

STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Materials	Conversion Cost	TOTAL
Cost incurred in Current Period	$ 42,400.00	$ 72,449.00	$            1,14,849.00
Total Equivalent Units	$ 14,000.00	$ 13,000.00
Cost per Equivalent Units	$ 3.03	$ 5.57
Cost of Beginning WIP			$                  5,000.00
Total cost to be accounted for			$            1,19,849.00

Conversion cost includes Direct labor and Overheads cost.

Equivalent cost per unit for materials for the month of May=$3.03 per Unit

Equivalent cost per unit for conversion costs for the month of May = $5.57