Question

Data: Water Gear Shaping Department Month Ended May 31 Flow of Equivalent Units Physical Direct Conversion...

Data:

 Water Gear Shaping Department Month Ended May 31 Flow of Equivalent Units Physical Direct Conversion Flow of Production Units Materials Costs Units to account for: Beginning work in process, May 1 0 Started in production during May 66,000 Total physical units to account for 66,000 Units accounted for: Completed and transferred out during May 50,000 50,000 50,000 Ending work in process, May 31 16,000 16,000 4,800 * Total physical units accounted for 66,000 Total equivalent units 66,000 54,800 *16,000 units each 30% complete = 4,800 equivalent units
 Water Gear Shaping Department Month Ended May 31 Direct Conversion Materials Costs Total Beginning work in process, May 1 \$0 \$0 \$0 Costs added during May: 135,000 65,250 * 200,250 Total costs to account for \$135,000 \$65,250 \$200,250 *\$22,000 of direct labour plus \$43,250 of manufacturing overhead = \$65,250 of conversion costs

Water GearWater Gear​, a sporting goods​ company, produces swim masks. During May​, the Shaping Department determined the following equivalent units and incurs the following costs while working on 66,000.

Suppose direct labour is \$52,000 rather than \$22,000. Now what is the conversion cost per equivalent​ unit?

 Water Gear Shaping Department Conversion Cost per Equivalent Unit Conversion Flow of Production Costs Cost to account for
 Cost per equivalent unit

 Water Gear Shaping Department Conversion Cost per Equivalent Unit Conversion Flow of Production Costs Beginning work in process, May 1 \$                - Costs added during May: \$       95,250 Cost to account for \$       95,250 Total equivalent units 54,800 Cost per equivalent unit \$            1.74

Cost per equivalent unit = \$95250/54800 = \$1.738 = \$1.74

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