Garrison Company adds direct materials at the beginning of the process and adds conversion costs throughout the process. The fol

Question

3 years ago

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Garrison Company adds direct materials at the beginning of the process and adds conversion costs throughout the process. The fol

lowing data represents data in the Shaping Department WIP, April 1 7 comma 000 units Transferredminusin costs in WIP, April 1 $79,940 Direct materials (100%) in WIP, April 1 $24,420 Conversion costs (55%) in WIP, April 1 $23,400 Units transferredminusin 49 comma 000 Transferredminusin costs during April $550,900 Units completed 46 comma 000 April direct materials cost $155,500 April conversion costs $239,250 WIP, April 30 10 comma 000 units (100% for materials and 40% for conversion costs) What are the equivalent units for conversion costs?

Business

1 answer:

djverab [1.8K] · Answer 1 · 2022-02-11T13:07:41+03:00

Answer:

Equivalent Units for conversion = 50,000 units

Cost per equivalent unit for conversion = $5.253

Explanation:

WIP, April 1 = 7,000 units

Transferred-costs in WIP, April 1 = $79,940

Direct materials (100%) in WIP, April 1 = $24,420

Conversion costs (55%) in WIP, April 1 = $23,400

Units transferred = 49,000

Transferred costs during April = $550,900

Units completed = 46,000

April direct materials cost =$155,500

April conversion costs =$239,250

WIP, April 30 =10,000 units

100% for materials and 40% for conversion costs

Required = Equivalent Units for conversion cost?

Solution

Equivalent Units for conversion = 100% of units completed + 40% of units in work in process

Equivalent Units for conversion = (46000 x 100%) + ( 10,000 x 40%)

Equivalent Units for conversion = 46,000 + 4000

Equivalent Units for conversion = 50,000 units

Cost per equivalent unit for conversion = Total conversion cost/Equivalent unts for conversion

Cost per equivalent unit for conversion = (23,400+239,250) /50,000units

Cost per equivalent unit for conversion = $5.253