30. On March 1, Upton Company’s Packaging Department had work in process inventory of 8,820 units, which had been transferred in from the Finishing Department. These units had accumulated costs of $315,000 in previous departments and $16,000 for conversion costs in the Packaging Department. During March, 30,000 units were transferred into the department. These units had accumulated costs of $770,000 in the previous departments. The Packaging Department incurred $54,000 in conversion costs during the month. On March 31, 700 units remained in ending inventory. These units were 80% complete with respect to conversion costs. Compute the cost per equivalent unit for transferred-in costs and for conversion costs for the Packaging Department using the weighted average method.

The cost per equivalent unit for transferred-in costs and for conversion costs for the Packaging Department using the weighted average method is $27.95 and $1.81 respectively

Explanation:

For computing the cost per equivalent unit for transferred-in costs and for conversion costs, first, we have to compute the transferred out units which is shown below:

= Beginning work in process inventory units + units transferred - ending work in process inventory units

= 8,820 units + 30,000 units - 700 units

= 38,120 units

Now for transferred-in costs, the per equivalent cost equal to

= (Accumulated costs + accumulated costs) ÷ (transferred out units + ending work in process inventory units)

= ($315,000 + $770,000) ÷ (38,120 units + 700 units)

= $27.95

For conversion costs , the per equivalent cost equal to

= (Accumulated costs + accumulated costs) ÷ (transferred out units + ending work in process inventory units × completion percentage)

= ($16,000 + $54,000) ÷ (38,120 units + 700 units × 80%)

= $1.81