Walldorf, a computer memory card manufacturer, measures costs using a process costing system. Direct materials are used 100% at the start of the manufacturing process. At the beginning of the month, there was no reprint. Manufacturing of 7,500 new cards began this month, and 4,500 cards were completed and sent to Finished Goods. During the manufacturing process, 1,500 cards were discarded as defective products. 1,500 defective products are within the expected range and are considered normal spoilage. The direct material cost incurred this month is $150,000. Re-production at the end of the month is 100% completed at direct materials costs. Quality inspection is performed when the manufacturing process is 100% completed, and this is also the time when the sponge is found.

Requirement: Cost per equivalent unit of direct material?

Requirement: How much is the direct material cost of 4,500 cards sent to product inventory in good units?

Requirement: What is the direct material cost of the restoration at the end of the month?

Answer rating: 100% (QA)

To calculate the cost per equivalent unit of direct material we need to consider both the completed ... View the full answer