Happy Company manufactures tape dispensers.Its Assembly department had the following output and costs: Units started and completed $\quad 70,000$
$\begin{array} { l l } \text { Started and in process } & 10,000 \end{array}$ These units had all materials added but were only 60% complete as far as conversion costs.Direct materials costs were $560,000; conversion costs were $240,000.The unit cost of direct materials is _____.

Question

Quizplus · Accepted Answer

The unit cost of direct materials is calculated by dividing the total direct materials costs by the total units produced. The total units produced include both the units started and completed (70,000) and the units that were started and in process (10,000), for a total of 80,000 units. The direct materials cost is $560,000. Therefore, the unit cost of direct materials is $560,000 / 80,000 = $7.00.

Happy Company Manufactures Tape Dispensers 70,000\quad 70,00070,000 Started and in process 10,000\begin{array} { l l } \text { Started and in process } & 10,000 \end{array} Started and in process ​10,000​

Happy Company Manufactures Tape Dispensers $\quad 70,000$ $\begin{array} { l l } \text { Started and in process } & 10,000 \end{array}$