Sunland Company has the following equivalent units of production for July: materials 21800 and conversion costs 21600.

Production cost data are:
Materials Conversion Work in process, July 1 $ 5500 $ 2200
Costs added in July 49000 41000

The unit production costs for July are:

$2.5 and $2

Explanation:

The computation of the unit production cost for the month of July is shown below:

Unit production cost is

= Total cost  ÷ Number of equivalent units

The total cost includes the opening + cost added

For materials cost

= ($5,500 + $49,000) ÷ 21,800

= $2.5

And, for conversion cost, it is  

= ($2,200 + $41,000) ÷ 21,600

= $2

We simply divided the total cost with the number of equivalents units so that the unit production cost could come

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