Holcomb Company uses the weighted-average method in its process costing system.

Question

Holcomb Company uses the weighted-average method in its process costing system. The Shaping Department is the second department in its production process. The data below summarize the department's operations in January.

The accounting records indicate that the conversion cost that had been assigned to beginning work-in-process inventory was $5,096 and a total of $87,668 in conversion costs were incurred in the department during January.
What was the cost per equivalent unit for conversion costs for January in the Shaping Department? (Round to three decimal places.)

$1.654.

$1.752.

$1.490.

$1.499.

Units Percent Complete with Respect to Conversion Beginning work-in-process inventory 3,800 90 % Transferred in from the prior department during January 53,000 Completed and transferred to the next department during January 51,300 Ending work-in-process inventory 5,500 30 %

Explanation / Answer

Equivalent unit for conversion = [units completed and transfered out * % of completion ] +[ending WIP *% of completion]

   =[51300*100%]+[5500*30%]

   = 51300+ 1650

    = 52950 units

Total conversion cost = 5096+87668 = 92764

cost per equivalent unit for conversion costs =Total conversion cost /equivalent unit

    = 92764 /52950

   = $ 1.752

correct option is "B"

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.