Question

The Jones Corporation uses a process system. During the current period, 2,500 units were started and 1,100 units were completed and transferred out. Ending units were 60% complete for materials and 45% complete for conversion costs. Direct materials costs added were $35,405 and conversion costs added were $32,870. There was no beginning WIP Inventory and conversion costs are added evenly throughout the process. At the end of the period, the cost per equivalent unit for conversion costs would be closest to

Answer 1

The Jones Corporation

At the end of the period, the cost per equivalent unit for conversion costs would be closest to:

$19

Step-by-step explanation:

a) Data and Calculations:

Units started during the current period = 2,500

Units completed and transferred out = 1,100

Ending inventory of units = 1,400

Degree of completion for ending inventory:

Materials = 60%

Conversion = 45%

Equivalent production:

Direct materials Conversion

Started and completed 1,100 1,100 (100%)

Ending inventory 840 (1,400 * 60%) 630 (1,400 *45%)

Total equivalent unit 1,940 1,730

Cost per equivalent unit:

Direct materials Conversion

Cost incurred $35,405 $32,870

Total equivalent unit 1,940 1,730

Cost per equivalent unit $18.25 $19