Question

Darden Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 21,400 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 $24,700. An additional 101,000 units were started into production during the month. There were 34,000 units in the ending work in process inventory of the Welding Department that were 70% complete with respect to conversion costs. A total of $853,880 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs for the month is closest to:

Answer 1

Units completed and transferred = 21400+101000-34000= 88400
Units completed and transferred out	88400
Ending work in process inventory	23800	=34000*70%
Equivalent unit for conversion costs	112200
Beginning work in process inventory costs	24700
Add: Current period costs	853880
Total costs	878580
Divided by Equivalent unit for conversion costs	112200
Cost per equivalent unit for conversion costs	7.83	(rounded off)