Victory Company uses weighted-average process costing to account for its product

Question

Victory Company uses weighted-average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 725,000 units of product to finished goods. At the end of November, the work in process inventory consists of 208,000 units that are 70% complete with respect to conversion. Beginning inventory had $606,450 of direct materials and $130,590 of conversion cost. The direct material cost added in November is $4,058,550, and the conversion cost added is $2,481,210. Beginning work in process consisted of 65,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 65,000 were from beginning work in process and 660,000 units were started and completed during the period. 2. Compute both the direct material cost and the conversion cost per equivalent unit Cost per equivalent unit of production Materials Conversion Total costs Costs Costs Equivalent units of production EUP EUP Cost per equivalent unit of production (rounded to 2 decimals

Explanation / Answer

Compute cost per equivalent unit

Cost per equivalent unit of production Materials Conversion Beginning work in process 606450 130590 Cost added during production 4058550 2481210 Total cost Costs 4665000 Costs 2611800 / Equivalent unit of production EUP 933000 EUP 870600 Cost per equivalent unit of production (rounded to 2 decimals) 5 3

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