The cost per equivalent unit of Direct Materials (DM) of a company for a particular process for June is $0.49. DM costs in beginning Work-in-Progress (WIP) Inventory is $260, and DM costs added to WIP Inventory during the period is $6,600. Assuming the company follows the Weighted-Average method of process costing, find the total equivalent units of DM for the above process.

Question

Quizplus · Accepted Answer

Total Costs to Account For = Direct Materials Costs in Beginning WIP Inventory + Direct Materials Costs Added to WIP Inventory during the Period
Therefore, Total Cost to Account For = $260 + $6,600
= $6,860
Total Equivalent Units of Direct Material = Total Costs to Account for/Cost per Equivalent Unit of DM
= $6,860/$0.49
= 14,000 units

The Cost Per Equivalent Unit of Direct Materials (DM) of a Company