Managerial Accounting: E4-7B ThinkBlue Company makes two kinds of ink
Managerial Accounting E4-7B ThinkBlue Company makes two kinds of ink and uses a process costing system. The company’s WIP inventory for blue ink on November 1 consisted of 15,000 units. An additional 12,000 units were entered into production in November, and 4,500 units were completed and transferred to finished goods inventory. The 22,500 units in ending WIP inventory were 100% complete as to materials and 80% complete as to conversion costs. Cost information for November for blue ink production is as follows: Costs in beginning WIP: Direct labor 30,000 Direct materials 15,000 Manufacturing overhead 45,000
The following costs were added during the month: Direct labor 7,500 Direct materials 22,260 Manufacturing overhead 30,000
Required: a. Prepare a schedule of equivalent units. b. Compute the cost per equivalent unit for materials. c. Compute the cost per equivalent unit for conversion.