Question

# Darden Corporation uses the weighted-average method in the process costing system. The first processing department the...

Darden Corporation uses the weighted-average method in the process costing system. The first processing department the Welding Department, started the month with 18,200 units in its beginning work in process inventory that were 10% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was \$16,700. An additional 85,000 units were started into production during the month. There were 18,000 in the ending work in process inventory of the Welding Department that were 70% complete with respect to conversion costs. A total of \$837,880 in conversion costs were incurred in the department during the month. The cost per equivalent unit for the conversion costs for the month is closest to:

A: \$8.738

B: \$9.965

C: \$9.200

D: \$8.486

Unit transferred to next department = Units in beginning work in process + Units started in to production – Units in ending work in process

= 18,200 + 85,000 – 18,000 = 85,200

Equivalent units of production w.r.t conversion cost = Units transferred to next department + equivalent units in ending work in process

= 85,200 + 18,000 x 0.7 = 85,200 – 13,090 = 97,800

Computation of cost per equivalent units:

 Cost of beginning work in process inventory \$   16,700 Cost added during the period \$ 837,880 Total cost (C) \$ 854,580 ÷Equivalent units of production (n) 97,800 Cost per equivalent units \$   8.7380

Hence option “A. \$ 8.738” is correct answer.

#### Earn Coins

Coins can be redeemed for fabulous gifts.