At Trapeze Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include: What is the cost per equivalent unit for direct materials?
A)$2.54
B)$2.76
C)$3.11
D)$3.10

Question

At Trapeze Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include:  What is the cost per equivalent unit for direct materials?
A)$2.54 
B)$2.76 
C)$3.11 
D)$3.10

Quizplus · Accepted Answer

Since Trapeze Corporation adds direct materials at the beginning of the process, the cost per equivalent unit for direct materials is simply the total cost of direct materials divided by the total number of equivalent units. According to the information given, the total cost of direct materials is not provided, but the total cost per unit is $11.03 and the total conversion cost per unit is $7.29. Therefore, the total cost per equivalent unit is $11.03 + $7.29 = $18.32. Since the conversion cost is uniformly applied, it is not included in the cost per equivalent unit for direct materials. To find the cost per equivalent unit for direct materials, we subtract the conversion cost per unit from the total cost per unit: $18.32 - $7.29 = $11.03. Therefore, the cost per equivalent unit for direct materials is $11.03. Choosing the closest option, the answer is B) $2.76, which is $11.03 divided by 4.

At Trapeze Corporation, Direct Materials Are Added at the Beginning