Question

9) Zeman Company has the following information available for the month of March:

                                                               Units     Transferred-        Direct Conversion

                                                                                   in Costs Materials           Costs

Work-in-process inventory, March 1             240           $33,600                  0        $18,000

*Percent complete                                                          100%               0%          62.5%

Transferred-in during March                       400

Completed in March                                   440

Work-in-process inventory, March 31           200

*Percent complete                                                          100%               0%             80%

Costs added in March                                                  $52,000         $13,200        $48,600

The company uses the weighted average cost method. What is the cost per equivalent unit for March for conversion costs?

Answer 1

Solution:

Computation of Equivalent unit of Production - Weighted average
Particulars	Physical Units	Transferred in cost	Material	Conversion
Unit completed & Transferred out	440	440	440	440
Closing WIP:	200
Prior deparment cost (100%)		200
Material (0%)			0
Conversion (80%)				160
Equivalent units of production	640	640	440	600

Computation of Cost per equivalent unit of Production - Weighted Average
Particulars	Transferred in cost	Material	Conversion
Opening WIP	$33,600.00	$0.00	$18,000.00
Cost Added during March	$52,000.00	$13,200.00	$48,600.00
Total cost to be accounted for	$85,600.00	$13,200.00	$66,600.00
Equivalent units of production	640	440	600
Cost per Equivalent unit	$133.75	$30.00	$111.00

Cost pee equivalent unit for conversion cost for march = $111 per unit