Question

Diston Company uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 18,000 units in its beginning work in process inventory that were 30% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $44,820. An additional 90,000 units were started into production during the month. There were 21,000 units in the ending work in process inventory of the Welding Department that were 10% complete with respect to conversion costs. A total of $677,970 in conversion costs were incurred in the department during the month.A. $8.112 B. $8.300 C. $7.533 D. $6.108

Answer 1

Answer:

The cost per equivalent unit for conversion costs for the month is closest to: A. $8.112

Explanation:

Weighted-average method

Units transferred to the next department = Units in beginning work in process + Units started into production − Units in ending work in process

= 18,000 + 90,000 − 21,000 = 87,000

                                                                             Conversion

Unit transferred to the next department               87,000

Ending work in process:

Conversion: 21,000 units × 10%                              2,100

Equivalent units of production                               89,100

                                                                            Conversion

Cost of beginning work in process inventory       44,820

Costs added during the period                             677,970

Total cost (a)                                                            722,790

Equivalent units of production (b)                            89,100

Cost per equivalent unit (a) ÷ (b)                               $8.11