Question

Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 1,100 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete Materials costs $ 6,400 65% Conversion costs $ 7,500 45% A total of 7,900 units were started and 6,600 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Cost Materials costs $ 126,200 Conversion costs $ 207,700 The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs. The cost per equivalent unit for conversion costs for the first department for the month is closest to: Multiple Choice $24.83 $29.76 $26.96 $28.92

Answer 1

d. $28.92

Step-by-step explanation:

Ending inventory units = 1,100 + 7,900 - 6,600

Ending inventory units = 2,400

Equivalent unit for conversion costs = 6,600 + (2,400*35%)

Equivalent unit for conversion costs = 6,600 + 840

Equivalent unit for conversion costs = 7,440

Cost per equivalent unit for conversion costs = ($7,500 + $207,700) / 7,440

Cost per equivalent unit for conversion costs = $215,200 / 7,440

Cost per equivalent unit for conversion costs = $28.92473

Cost per equivalent unit for conversion costs = $28.92.