Information concerning Department A of Ali Company for the month of June is as follows: Units
Materials
Costs
Work in process,beginning of month
20,000
$14,550
Started in June
85,000
$66,300
Units completed
90,000
Work in process,end of month
15,000
All materials are added at the beginning of the process.Using the average cost method,the cost (rounded to two places)per equivalent unit for materials for June is:
A)$0.74.
B)$0.90.
C)$0.77.
D)$0.78.

Question

Quizplus · Accepted Answer

To calculate the cost per equivalent unit for materials using the average cost method, we need to divide the total cost of materials by the total equivalent units. 
Total cost of materials = Cost of beginning work in process + Cost of materials added in June
= $14,550 + $66,300
= $80,850
Total equivalent units = Units completed + Units in ending work in process
= 90,000 + 15,000
= 105,000
Cost per equivalent unit for materials = Total cost of materials / Total equivalent units
= $80,850 / 105,000
= $0.77 (rounded to two decimal places)

Therefore, the best choice is C, $0.77.

Information Concerning Department a of Ali Company for the Month