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Vesnalui
17 days ago
11

For the month of September, Florida, Inc., incurs a direct materials cost of $12,000 for 7,500 gallons of strawberry lemonade pr

oduced in its Mixing Department. It also incurs conversion costs of $6,000 with 80% completed. If the direct materials cost per equivalent unit was $0.90 in August and the conversion cost per equivalent unit was $1.15 per gallon in August, what is the difference in the direct materials cost per equivalent unit between the two months
Business
1 answer:
marusya05 [3K]17 days ago
8 0

Response:

The difference in the cost of direct materials per equivalent unit between the two months is $0.70.

Clarification:

First, determine the direct cost per equivalent unit for September

Direct cost per equivalent unit = Total Cost / Total Equivalent units

      = $12,000 / 7,500

      = $1.60

The difference between the two months.

September   =  $1.60

Less August = ($0.90)

Difference      = $0.70

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