Darden Corporation uses the weighted-average method in its process costing syste
ID: 2341694 • Letter: D
Question
Darden Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 22,000 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 $26,200. An additional 104,000 units were started into production during the month. There were 37,000 units in the ending work in process inventory of the Welding Department that were 70% complete with respect to conversion costs. A total of $856,880 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
$12.286
$13.000
$7.686
$10.003
Explanation / Answer
Units transferred to other department = opening WIP + Units introduced - closing WIP
=22000+ 104000-37000
= 89000
Calculation of equivalent units with regard to conversion cost
Units trans cost ferred to other department + equivalent units of closing wip
= 89000+ (37000×70%)
=114900
Calculation of total conversion cost
Cost of beginning WIP + cost added during the year
= 26200+ 856880
=883080$
Calculation of conversion cost per unit
=Total cost/ equivalent units
= 883080/114900
=$7.686
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