Question

# Sparky Corporation uses the weighted-average method of process costing. The following information is available for February...

Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department: Units: Beginning Inventory: 37,000 units, 100% complete as to materials and 60% complete as to conversion. Units started and completed: 134,000. Units completed and transferred out: 171,000. Ending Inventory: 36,000 units, 100% complete as to materials and 35% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: \$55,000. Costs in beginning Work in Process - Conversion: \$60,850. Costs incurred in February - Direct Materials: \$369,560. Costs incurred in February - Conversion: \$611,150. Calculate the cost per equivalent unit of conversion.

a. 3.20

b. 4.98

c. 4.58

d. 3.91

e. 3.66

 Calculation of equivalent unit Particulars unit material % unit % conversion Unit Unit completed 171000 100% 171000 100% 171000 WIP- Ending 36000 100% 36000 35% 12600 Equivalent unit 207000 207000 183600 Calculation of cost per equivalent unit of conversion Particulars Conversion cost Beginning cost of inventory 60850 Cost incurred in February 611150 Total cost 672000 Cost per equivalent unit of conversion = total cost of conversion/equivalent unit of conversion Cost per equivalent unit of conversion = 672000/183600 Cost per equivalent unit of conversion = 3.66 Option " e" is CORRECT

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