Question

According to the company's records, the conversion cost in beginning work in process inventory was $15,264 at the beginning of June. Additional conversion costs of $68,208 were incurred in the department during the month. What was the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)

Answer 1

$0.873

Step-by-step explanation:

Limber Company

Calculation of cost per equivalent unit for conversion costs for the month:

Units transferred:

Begining Work in process 18,000

Add Units started into production during the month 81,000

Less Ending Work in process (17,000)

Units completed and transferred out during the month 82,000

The Equivalent units of production

Conversion

Transferred to next department 82,000

Add Ending work in process 13,600

( 17,000 units × 80% complete

Equivalent units of production 95,600

Cost per Equivalent Unit

Conversion

Cost of beginning work in process $15,264

Add Cost added during the period 68,208

Total cost $83,472

Equivalent units of production $95,600

Cost per equivalent unit:

Total units/Equivalent units of production

Hence:

$83,472/$95,600

=$0.873