Question

Cornerstone Exercise 6.6 (Algorithmic) 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 70,000 Total units to account for 70,000 Units to account for: Units completed: From BWIP 0 Started and completed 48,000 48,000 Units in EWIP 22,000 Total units accounted for 70,000 Inputs Direct Materials Conversion Costs $31,500 $54,600 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 $4,800? Calculate the new unit cost. If required, round your answer to the nearest cent. $ per unit

Answer 1

Beggining units	0	Transferred out	48,000
Started intro production	70000	Ending units	22,000
Units accounted for	70000		70000
Equivalent units	Material	Conversion cost
Units transferred                      A	48000	48000
Ending Units	22,000	22,000
Completion	100%	30%
B	22000	6600
Total units	70000	54600
Cost per equivalent units
Particulars	Material	Conversion cost	total
As at beginning	0	0	0
Added during the month	31500	54600	86100
Cost to be accounted for	31500	54600	86100
Total eqivalent units	70000	54600
Cost per equivalent unit	0.45	1.00	1.45
Cost per equivalent unit = Cost to be accounted for / Total equivalent units

3.

Cost per equivalent units
Particulars	Material	Conversion cost	total
As at beginning	0	0	0
Added during the month	36300	54600	90900
Cost to be accounted for	36300	54600	90900
Total eqivalent units	70000	54600
Cost per equivalent unit	0.52	1.00	1.52
Cost per equivalent unit = Cost to be accounted for / Total equivalent units