ABC Company uses process costing to track its costs in two sequential production departments: Forming and Finishing. The following information is provided regarding the Forming department.
Forming Department
Month Ended July 31
Unit information
Beginning work in process, July 1 --- 10,000
Started into production during July --- 21,000
Completed and transferred to Finishing department during July --- 19,000
Ending work in process, July 31 (40% complete as to direct materials and 45% complete as to conversion costs) --- 12,000
Cost information
Beginning work in process as of July 1 consists of $13,000 of direct materials costs and $6,500 of conversion costs) --- $19,500
Direct materials used in July --- $34,000
Conversion costs incurred in July --- $14,850
Required:
(a) Calculate the equivalent units for direct materials. (Show your work)
(b) Calculate the cost per equivalent unit for direct materials. (Show your work)