Question

Hache Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 17,800 units in its beginning work in process inventory that were 20% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $8,120. An additional 90,600 units were started into production during the month and 93,600 units were completed in the Welding Department and transferred to the next processing department. There were 14,800 units in the ending work in process inventory of the Welding Department that were 90% complete with respect to conversion costs. A total of $204,000 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: Multiple Choice $2.354 $1.984 $2.280 $2.045

Answer 1

Answer: $1.984

Explanation

	Conversion
Units transferred to the next department	93,600.00
Ending work in process:
(Conversion: 14,800 units × 90%)	13,320.00
Equivalent units of production	106,920.00
	Conversion
Cost of beginning work in process inventory	$         8,120.00
Costs added during the period	$     204,000.00
Total cost (a)	$     212,120.00
Equivalent units of production (b)	106,920.00
Cost per equivalent unit (a) ÷ (b)	1.984