Question

Dorchester Company, on March 1, 2019 has a beginning Work in Process inventory of zero. All materials are added into production at the beginning of its production. There is only one production WIP inventory. On March 1, Dorchester started into production 15,500 units. At the end of the month there were 11,000 units completed and transferred into the Finished Goods Inventory. The ending WIP was 50% complete with respect to conversion. For the month of March the following costs were incurred and recorded in the WIP:

            Direct Material                      $21,000

            Direct Labor 32,000

            Factory Overhead 20,000

Dorchester uses the weighted-average process costing method. Use this information to determine the cost per equivalent unit of conversion for the month of March: (Round & enter final answers to the nearest cent.)

Answer 1

Total cost of account for

= Conversion costs added during month

= Direct labor + Factory overhead

= 32,000 + 20,000

= $52,000

Equivalent units of conversion = Units completed and transferred + Ending work in process inventory x Completion percentage

= 11,000 + (15,500-11,000)4,500 x 50%

= 11,000 + 2,250

= 13,250

Cost per equivalent unit of conversion = Total cost to account for/Equivalent units of conversion

= 52,000/13,250

= $3.92

Cost per equivalent unit of conversion for the month of March = $3.92

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