Question

Kansas Company uses the weighted-average method in its process costing system. Operating data for the first processing department for the month of June appear below:

Units Percent Complete
Beginning work-in-process inventory 14,000 50 %
Started into production during June 105,500
Ending work-in-process inventory 27,000 80 %

According to the company's records, the conversion cost in beginning work-in-process inventory was $58,915 at the beginning of June. Additional conversion costs of $834,183 were incurred in the department during the month.

What was the cost per equivalent unit for conversion costs for the month?

Answer 1

Cost per equivalent unit of conversion cost:

= $7.827

Step-by-step explanation:

Cost per equivalent unit of conversion is the total conversion cost divided by the total equivalent units of conversion cost

Completed units t opening inventory + started newly - closing inventory

Completed = 14,000 + 105,500 - 27,000 = 92,500

Item units equivalent unit

completed unit 92500 100% × 92500 = 92,500

Closing inventory 27000 80% × 27,000 = 21600

Total equivalent units 114,100

cost per equivalent unit of conversion cost

= (58,915 + $834,18)/114,100

= $7.827