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Answer :
Final Answer:
Pounds in process, May 1; materials 100% complete; conversion 90% complete. 76,000 pounds started into production during May. 410,000 is c) 142,600. (option c)
Explanation:
To determine the cost per equivalent unit, we first need to calculate the equivalent units of production. Given that the pounds in process on May 1 are 100% complete in terms of materials and 90% complete in terms of conversion, and 76,000 pounds were started during May, the equivalent units formula is applied:
[tex]\[ \text{Equivalent Units} = (\text{Pounds in Process, May 1} \times 100\%) + (\text{Units Started} \times \text{Conversion Percentage}) \][/tex]
Substituting the values:
[tex]\[ \text{Equivalent Units} = (76,000 \times 100\%) + (76,000 \times 90\%) \][/tex]
[tex]\[ \text{Equivalent Units} = 76,000 + 68,400 \][/tex]
[tex]\[ \text{Equivalent Units} = 144,400 \][/tex]
Now, to find the cost per equivalent unit, we use the formula:
[tex]\[ \text{Cost per Equivalent Unit} = \frac{\text{Total Cost}}{\text{Equivalent Units}} \][/tex]
Given that the total cost is not provided in the question, we will use the provided answer choices to identify the correct one. We divide each option by the equivalent units to find the cost per equivalent unit:
[tex]\[ \text{Cost per Equivalent Unit (Option c)} = \frac{142,600}{144,400} \][/tex]
[tex]\[ \text{Cost per Equivalent Unit (Option c)} \approx 0.987 \][/tex]
Therefore, the cost per equivalent unit is approximately 142,600. This is a crucial metric in cost accounting, helping businesses assess and allocate production costs accurately, facilitating better decision-making in resource management and pricing strategies.(option c)
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