Question

David Corporation uses the weighted-average method in its process costing system. The first processing department, the...

David Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 21,000 units in its beginning work in process inventory that were 60% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $141,200. An additional 101,000 units were started into production during the month. There were 21,000 units in the ending work in process inventory of the Welding Department that were 20% complete with respect to conversion costs. A total of $443,250 in conversion costs were incurred in the department during the month. What would be the cost per equivalent unit for conversion costs for the month? (Round your final answer to 3 decimal places.)

$5.556

$4.213

$5.787

$5.797

Homework Answers

Answer #1

Units that are completed during the month = Units in beginning work in process inventory + Units started into production during the month - Units in ending work in process inventory

= 21,000 + 101,000 - 21,000

= 101,000

Equivalent units in process at the end of the month = 21,000 * 20% = 4,200

Equivalent production for the month = Units that are completed during the month + Equivalent units in process at the end of the month

= 101,000 + 4,200

= 105,200

Total cost = Beginning cost + Current cost

= 141,200 + 443,250

= 584,450

Cost per equivalent unit = Total cost / Total equivalent units completed

= 584,450 / 105,200

= 5.556

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