The debits to Work in Process-Assembl tn company), to and Lackawanna Corporation

Question

The debits to Work in Process-Assembl tn company), to and Lackawanna Corporation (a process concerning production, are as follows: in Process-Assembly Department for April, relating to the Erie costing company), together with other data April 1, Work in Process: 7,500 Materials cost, 3,000 units Conversion costs, 3,000 units, 80% completed Materials added during April, 10,000 units Conversion costs during April Goods finished during April, 11,500 units April 30, Work in Process, 1,500 units, 6,000 29,000 35,000 60% completed All materials are placed in process at the beginning of the process and the average cost method is used to cost the inventories. 75. The conversion cost per equivalent unit (to the nearest cent) for April is a. $2.70 b. $2.53 c $3.31 d. $5.60

Explanation / Answer

finished goods = 11500 units

closing inventory = 1500*60% = 900 units

Total Equivalent units completed = 12400 units

Cost per equivalent unit = costs in beginning Wip + current period costs

(Equivalent units completed and transferredout + ewuivalent units in WIP)

=35000 + 6000 /(11500 +9000)

= 41000/12400

=3.30645 0r 3.31 cents

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