Question

debits to Work in Process--Assembly Department for April, together with data concerning production, are as follows: April 1, work in process: Materials cost, 3,000 units $ 7,500 Conversion costs, 3,000 units, 80% completed 6,000 Materials added during April, 10,000 units 29,000 Conversion costs during April 35,000 Goods finished during April, 11,500 units --- April 30 work in process, 1,500 units, 60% completed --- All direct materials are placed in process at the beginning of the process and the average cost method is used to cost inventories. The conversion cost per equivalent unit (to the nearest cent) for April is:

Answer 1

The conversion cost per equivalent unit for April is calculated by dividing the total conversion costs of $35,000 by the sum of equivalent units for conversion costs, totaling 14,800 units. The equivalent units account for completed units, units from the beginning inventory that were already partially processed, and units partially completed by the end of April. The conversion cost per equivalent unit for April is $2.36.

Step-by-step explanation:

The conversion cost per equivalent unit is calculated by dividing the total conversion costs by the equivalent units for conversion costs. The equivalent units of production for conversion costs take into account the work done on the units in the beginning inventory, the units completed and transferred out, and the work done on the units remaining in ending inventory.

First, we calculate the equivalent units for conversion costs:

- Units completed: 11,500 (fully completed hence 100% of conversion costs).

- Work in Process, beginning (80% completed): 3,000 units x 80% = 2,400 equivalent units.

- Work in Process, ending (60% completed): 1,500 units x 60% = 900 equivalent units.

Adding these up gives us the equivalent units for conversion costs for April.

Equivalent units for conversion costs = Units completed + Equivalent units of beginning WIP + Equivalent units of ending WIP

Equivalent units for conversion costs = 11,500 + 2,400 + 900 = 14,800 equivalent units.

Now we can calculate the conversion cost per equivalent unit:

Conversion cost per equivalent unit = Total conversion costs / Equivalent units for conversion costs.

Conversion cost per equivalent unit = $35,000 / 14,800 = $2.36 (to the nearest cent).

Therefore, the conversion cost per equivalent unit for April is $2.36.

Answer 2

The conversion cost per equivalent unit is $3.31

Step-by-step explanation:

The computation of the conversion cost per equivalent unit is shown below:

= Total conversion costs ÷ Total equivalent units

where,

Total conversion cost = completed units + Conversion costs during April

= $6,000 + $35,000

= $41,000

And, the total equivalents units equal to

= Finished good units × percentage of completion + ending work in process units × percentage of completion

= 11,500 units × 100% + 1,500 units × 60%

= 11,500 units + 900 units

= 12,400 units

Now put these values to the above formula

So, the per unit would equal to

= $41,000 ÷ 12,400 units

= $3.31 per unit