Question

For the month of September, Florida, Inc., incurs a direct materials cost of $12,000 for 7,500 gallons of strawberry lemonade produced in its Mixing Department. It also incurs conversion costs of $6,000 with 80% completed. If the conversion cost per equivalent unit was $1.15 per gallon in August, what is the difference in the conversion cost per equivalent unit between the two months?

Answer 1

Answer:

$2,625

Explanation:

Conversion cost incurred in September = $6000

Conversion cost incurred in August = $1.15/gallon ×7500 gallons = $8,625

Difference = $8,625 - $6,000 = $2,625