Answer:
The cost per equivalent unit for conversion cost is closest to: $1.39.
Explanation:
<u>First Calculate the Equivalent units of production with respect to Conversion Costs :</u>
To Finish Opening Work In Process (20,000 × 80%) = 16,000
Started and Completed (150,000 - 20,000) × 100% = 130,000
Closing Work In Process (40,000 × 25%) = 10,000
Equivalent units of production with respect to Conversion Costs = 156,000
<u>Then, Calculate the cost per equivalent unit for conversion cost :</u>
Note : <em>We are only interested in the costs incurred in the current year because the costs of Opening Work In Process will automatically go towards the completed units (FIFO).</em>
Cost per equivalent unit = Total Current Costs ÷ Total Equivalent units
= $ 217,000 ÷ 156,000
= $1.39
Answers? I'm assuming one says waiting or teaching. Those might be the best choices
The flexible budget performance report directs managements attention to areas where corrective action can help control operations. Management uses the report to determine price and quantity variances.