A company starts work on 1000 physical units and completes 75 per cent of conversion activity. The costs are $1500 for conversion and $5000 for direct material. What is the cost per equivalent unit for direct material?
A) $10.00 per unit
B) $5.00 per unit
C) $6.00 per unit
D) $6.67 per unit

Question

Quizplus · Accepted Answer

The cost per equivalent unit for direct material is calculated by dividing the total direct material cost by the number of physical units. $5000 / 1000 units = $5.00 per unit.

A Company Starts Work on 1000 Physical Units and Completes