# Question & Answer: Direct material cost per equivalent unit is \$1.10 and there are 2000 physical units 100% c…..

Direct material cost per equivalent unit is \$1.10 and there are 2000 physical units 100% complete with respect to materials what are the total costs if these 2000 physical units are 50% complete with respect to conversion and conversion costs are 3.75 per equivalent unit? A) \$4950 B) \$5950 C) \$6950 D) None of the above

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Question & Answer: Direct material cost per equivalent unit is \$1.10 and there are 2000 physical units 100% c…..
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While using equivalent units approach to valuation of inventory we need to mutiply the equivalent units with their equivalent unit rates. As such the total cost = 2000 * 1.10 + 1000 * 3.75 = 5950 ……….option B is the correct one

Material units = 2000 given and 2000 is taken in equation because ………..100% complete

Converstion = 2000 given and 1000 is taken in equation because …………50% complete

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