Richards Corporation uses the weighted-average method of process
costing. The following information is available for October in its
Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion.
Units started and completed: 250,000.
Units completed and transferred out: 330,000.
Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.
Costs in beginning Work in Process - Direct Materials: $37,200.
Costs in beginning Work in Process - Conversion: $79,700.
Costs incurred in October - Direct Materials: $646,800.
Costs incurred in October - Conversion: $919,300.
Calculate the cost per equivalent unit of conversion.
Answer option d $3(explanation below)
Equivalent units of production under weighted average method for conversion
|Units completed and transferred out||
|Total equivalent units of production for conversion||333000|
Cost per Equivalent unit
Total cost/Equivalent unit of Conversion
= $79700+$919300/333000 = $3
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