Mayer Company has recently tried to improve its analysis for its manufacturing process. Units started into production equaled 18000 and ending work in process equaled 1200 units. Mayer had no beginning work in process inventory. Conversion costs are applied equally throughout production and materials are applied at the beginning of the process. How much is the materials cost per unit if ending work in process was 25% complete and total materials costs equaled $72000?
A) $4.00.
B) $4.21.
C) $16.00.
D) $3.75.

Question

Quizplus · Accepted Answer

The materials cost per unit is calculated by dividing the total materials costs by the total units that had materials applied. Since materials are applied at the beginning of the process, all 18,000 units started would have materials applied to them. Therefore, the materials cost per unit is $72,000 / 18,000 units = $4.00 per unit.

Mayer Company Has Recently Tried to Improve Its Analysis for Its