Amerisama Company makes a variety of products. Its Texturing Department reports the following information for September of the current year: Units: Completed and transferred out 7,400 Unfinished units, work in process, September 30: 3,500* Costs: Direct Materials $110,000 Direct Labor 55,000 Manufacturing overhead 80,000 *100% complete for direct materials and 40% complete for conversion costs incurred. Compute the cost per equivalent unit for conversion costs. $10.09 $9.09 $12.39 $15.34
Amerisama Company makes a variety of products. Its Texturing Department reports the following information for September of the current year: Units: Completed and transferred out 7,400 Unfinished units, work in process, September 30: 3,500* Costs: Direct Materials $110,000 Direct Labor 55,000 Manufacturing overhead 80,000 *100% complete for direct materials and 40% complete for conversion costs incurred. Compute the cost per equivalent unit for conversion costs. $10.09 $9.09 $12.39 $15.34
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Amerisama Company makes a variety of products. Its Texturing Department reports the following information for September of the current year:
Units:
Completed and transferred out 7,400
Unfinished units, work in process, September 30: 3,500*
Costs:
Direct Materials $110,000
Direct Labor 55,000
Manufacturingoverhead 80,000
*100% complete for direct materials and 40% complete for conversion costs incurred.
Compute the cost per equivalent unit for conversion costs.
$10.09
$9.09
$12.39
$15.34
Units:
Completed and transferred out 7,400
Unfinished units, work in process, September 30: 3,500*
Costs:
Direct Materials $110,000
Direct Labor 55,000
Manufacturing
*100% complete for direct materials and 40% complete for conversion costs incurred.
Compute the cost per equivalent unit for conversion costs.
$10.09
$9.09
$12.39
$15.34
Expert Solution
Step 1
Total conversion cost incurred
= Direct labor + Manufacturing overhead
= $55,000 + $80,000
= $135,000
Equivalent units of conversion cost
= Units Completed and transferred out + Unfinished units, work in process, September 30
= 7,400 + (3,500 x 40%)
= 8,800
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