Answer:
Universal Manufacturing
Equivalent unit cost for conversion cost is $18.
Explanation:
a) Data and Calculations:
Beginning work in process = 10,000 units
Ending work in process = 15,000 units
Units started = 30,000 units
Units completed = 25,000 units
Cost of: Materials Conversion
Beginning WIP $60,000 $150,000
Current costs 180,000 480,000
Equivalent units of production: Materials Degree Conversion Degree
Units started and completed 25,000 100% 25,000 100%
Ending WIP 15,000 100% 10,000 2/3
Total equivalent unit 40,000 35,000
Total cost of production:
Cost of: Materials Conversion
Beginning WIP $60,000 $150,000
Current costs 180,000 480,000
Total cost $240,000 $630,000
Cost per equivalent unit:
Materials Conversion Total cost
Total cost $240,000 $630,000 $870,000
Total equivalent unit 40,000 35,000
Cost per equivalent unit $6 $18
b) Using the weighted average method, the costs in beginning inventory and current period costs are added and divided by the equivalent units of materials and conversion costs in order to establish an equivalent unit cost. The equivalent cost per unit in process costing describes the average unit cost for each product.
