David Corporation uses the weighted-average method in its process costing system
ID: 2420577 • Letter: D
Question
David Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 20,000 units in its beginning work in process inventory that were 80% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $133,200. An additional 85,000 units were started into production during the month. There were 21,000 units in the ending work in process inventory of the Welding Department that were 15% complete with respect to conversion costs. A total of $419,250 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 your final answer to 3 decimal places.)
rev: 03_09_2015_QC_CS-10038
A.$6.577
B.$6.339
C.$6.499
D.$4.811
David Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 20,000 units in its beginning work in process inventory that were 80% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $133,200. An additional 85,000 units were started into production during the month. There were 21,000 units in the ending work in process inventory of the Welding Department that were 15% complete with respect to conversion costs. A total of $419,250 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 your final answer to 3 decimal places.)
Explanation / Answer
As per weighted average method:
total units transferred out=20,000+85,000-21,000=84,000
Equivalent units=84,000+21,000*15%=84,000+3150=87,150
Total conversion cost=$133,200+$419,250=$552,450
cost per equivealent unit=$552,450/87,150=$6.339
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