Question

Darden Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 18,200 units in its beginning work in process inventory that were 10% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $16,700. An additional 85,000 units were started into production during the month. There were 18,000 units in the ending work in process inventory of the Welding Department that were 70% complete with respect to conversion costs. A total of $837,880 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs for the month is closest to:


Multiple Choice


$8.486


$9.965


$8.738


$9.200

Answer 1

Answer:

Correct answer is 8.738

Explanation:

Unit transferred out

= Beginning wip+unit started-ending wip

= 18200+85000-18000

Unit transferred out = 85200 unit

Equivalent unit

= Units transferred out+Ending inventory*percent completion

 = 85200+(18000*70%)

Equivalent unit = 97800 units

cost per equivalent unit of conversion cost

= Total cost/equivalent unit

= (16700+837880)/97800

Cost per equivalent unit of conversion cost = 8.738