Question

10. Parmentier Company uses the weighted-average method in its process costing system. The Molding Department is the second department in its production process. The data below summarize the department's operations in January. The accounting records indicate that the conversion cost that had been assigned to beginning work in process inventory was $5,096 and a total of $87,668 in conversion costs were incurred in the department during January. What was the cost per equivalent unit for conversion costs for January in the Molding Department

Answer 1

Answer:

$1.752  per unit

Explanation:

The computation of the cost per equivalent unit for conversion cost is as follows:

Total conversion cost for month of January

= Opening wip conversion cost + current production conversion cost

= $5,096 + $87,668

= 92,764

Now the total equivalent units is

= Units transferred out + ending wip

= 51,300 × 100% + 5,500 × 30%

= 52,950 units

Now the cost per equivalent unit is

= $92,764 ÷ 52,950 units

= $1.752  per unit