Smith Co started 40 000 units into production during the current period and completed 28 000. The other 12 000 units were 30% complete as to conversion costs at the end of the period. Total costs were $60 000 for material and $36 000 for conversion costs.
Material is added at the beginning of the production process. Unit raw material and conversion costs for the period were:
Raw materials cost Conversion cost

Question

Quizplus · Accepted Answer

The total material cost is $60,000 for 40,000 units, so the raw material cost per unit is $60,000 / 40,000 = $1.50. For conversion costs, the 28,000 completed units are 100% complete, and the 12,000 units in process are 30% complete, so equivalent units for conversion costs are 28,000 + (12,000 * 30%) = 28,000 + 3,600 = 31,600. The conversion cost per unit is $36,000 / 31,600 = $1.14. Therefore, the correct answer is D) $1.50 raw materials cost and $1.14 conversion cost.

Smith Co Started 40 000 Units into Production During the Current