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

Question

Dewey Company uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 15,000 units in its beginning work in process inventory that were 20% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $19,200. An additional 86,000 units were started into production during the month. There were 13,000 units in the ending work in process inventory of the Welding Department that were 60% complete with respect to conversion costs. A total of $575,360 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs is closest to:

I NEED TO SEE HOW THIS IS MANUALLY ANSWERED - STEP-BY-STEP

Explanation / Answer

Total equivalent no of units completed = Opening Inv + New units started - closing inv = 15000*0.80+86000-13000*0.60 = 90,200 Units % COmlete Conversion cost 15,000 20% $19,200 So conversion cost for balance 80% work = 80%*$19200/20% = $76,800 So 100%Conversion cost for 15000 units = $19,200 + $76,800 = $96,000 So COnversion cost per unit = $96,000/15000 = $6.40 So COnversin cost for equivalent 90,200 units is $575,360 So Conversion cost per equivalent unit = $575,360/90,200 = $6.38.....ANS 86,000

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