Exercise 4-20

Idaho Lumber Company grows, harvests, and processes timber for use in
construction. The following data pertain to the firm’s sawmill during
November.
Work in process, November 1:
Direct
i material
i l $ 65,000
Conversion 180,000
Costs incurred during November:
Direct material $425,000
Conversion 690,000
The equivalent units of activity for November were as follows: 7,000
equivalent units of direct material and 1,740 equivalent units of
conversion activity.

©Dr. Chula King

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Exercise 4-20 (continued)

Calculate the cost per equivalent unit, for both direct material and
conversion, during November. Use weighted-average process costing.
Direct
Material Conversion Total
WIP, November 1 $ 65,000 $180,000 $ 245,000
Costs incurred, November 425,000 690,000 1,115,000
Total costs to account for $490,000 $870,000 $1,360,000
÷ Equivalent units ÷ 7,000 ÷ 1,740
Costs per equivalent unit $70 $500 $570

©Dr. Chula King

All Rights Reserved