Cost per equivalent unit is kept separate for direct materials and conversion costs because:
A)the physical units are different for the two categories.
B)the total manufacturing costs are different for the two categories.
C)the equivalent units are different for the two categories.
D)the ending inventories are different for the two categories.

Question

Quizplus · Accepted Answer

The equivalent units for direct materials and conversion costs (labor and overhead) often differ because materials are typically added at the beginning of the production process, while labor and overhead are incurred throughout the process. This results in different stages of completion for materials versus conversion costs at any point in time, necessitating separate calculations for cost per equivalent unit.

Cost Per Equivalent Unit Is Kept Separate for Direct Materials