Madison Industries has equivalent units of 8,000 for materials and for conversion costs.Total manufacturing costs are $160,000.Total materials costs are $120,000.How much is the conversion cost per unit?

Question

Quizplus · Accepted Answer

The conversion cost per unit is calculated by subtracting the materials cost from the total manufacturing costs and then dividing by the equivalent units for conversion costs: ($160,000 - $120,000) / 8,000 = $5.

Madison Industries Has Equivalent Units of 8,000 for Materials and for Conversion