Question

Kansas Company uses the weighted-average method in its process costing system. Operating data for the first processing department for the month of June appear below:

Units Percent Complete
Beginning work-in-process inventory 14,000 50 %
Started into production during June 105,500
Ending work-in-process inventory 27,000 80 %

According to the company's records, the conversion cost in beginning work-in-process inventory was $58,915 at the beginning of June. Additional conversion costs of $834,183 were incurred in the department during the month.

What was the cost per equivalent unit for conversion costs for the month?

Answer 1

Answer:

Cost per equivalent unit of conversion cost:

= $7.827

Explanation:

Cost per equivalent unit of conversion is the total conversion cost divided by the total equivalent units of conversion cost

Completed units t opening inventory + started newly - closing inventory

Completed = 14,000 + 105,500 -  27,000 = 92,500

Item                         units                                          equivalent unit

completed unit       92500     100% ×   92500    =  92,500

Closing inventory   27000     80% ×  27,000 =       21600

Total equivalent units                                                   114,100

cost per equivalent unit of conversion cost

= (58,915 + $834,18)/114,100

= $7.827