Question

Kenney Co. uses process costing to account for the production of canned energy drinks. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 15,600 units for materials and 12,950 units for conversion costs. Beginning inventory consisted of $9,500 in materials and $4,450 in conversion costs. April costs were $55,800 for materials and $55,824 for conversion costs. Ending inventory still in process was 5,300 units (100% complete for materials, 50% for conversion). The cost per equivalent unit for conversion costs using the weighted average method would be:_______.
a. $4.00.b. $4.40.c. $1.10.d. $8.70.

Answer 1

Answer:

Kenny Co.

Cost per equivalent units:

                             Materials       Conversion

Costs:                  $55,800          $55,824

Equivalent units     15,600             12,950

Cost per equivalent:

Materials:

$55,800/15,600 =  $3.58           $4.31 ($55,824/12,950)

Cost per equivalent unit for Conversion = $4.31

Explanation:

a) Data and Calculations:

Equivalent units:

Materials 15,600

Conversion 12,950

Beginning WIP:

Materials $9,500

Conversion $4,450

April costs:

Materials = $55,800

Conversion $55,824

Ending WIP:

Materials = 5,300 (100% complete)

Conversion = 2,650 (50% complete)