Computations to solve the following homework problem: David Company uses the wei

ID: 2345087 • Letter: C

Question

Computations to solve the following homework problem:
David Company uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 18,000 units that were 10% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $16,200. An additional 84,000 units were started into production during the month. There were 17,000 units in the ending work in process inventory of the Welding Department that were 70% complete with respect to conversion costs. A total of $836,880 in conversion costs were incurred in the department during the month.
What would be the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)

Explanation / Answer

units

equivalent units

beginning inventory

18,000

started into production

84,000

to account for

102,000

ending inventory

17,000

11900

(17,000*.7)

completed and transferred

85,000

96,900

costs:

beginning

16,200

added

836,880

total

853,080

Cost per equivalent unit for conversion costs = 853,080/96,900 = $8.804 per equivalent unit