Hache Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 17,900 units in its beginning work in process inventory that were 20% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $8,200. An additional 90,800 units were started into production during the month and 93,800 units were completed in the Welding Department and transferred to the next processing department. There were 14,900 units in the ending work in process inventory of the Welding Department that were 90% complete with respect to conversion costs. A total of $204,200 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs for the month is closest to:a. $2.055b. $2.290c. $1.981d. $2.364

Question

Business

Owen Lin

28 October, 02:11

Hache Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 17,900 units in its beginning work in process inventory that were 20% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $8,200. An additional 90,800 units were started into production during the month and 93,800 units were completed in the Welding Department and transferred to the next processing department. There were 14,900 units in the ending work in process inventory of the Welding Department that were 90% complete with respect to conversion costs. A total of $204,200 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs for the month is closest to:a. $2.055b. $2.290c. $1.981d. $2.364

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Answers (2)

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Bobby Moreno · Answer 1

The cost per equivalent unit for conversion costs for the month is closest c. $1.981.

Explanation:

Conversion

Units transferred to the next department 93,800

Ending work in process:

Conversion: 14,900 units * 90% 13,410

Equivalent units of production 107,210

Conversion

Cost of beginning work in process inventory 8,200

Costs added during the period 204,200

Total cost 212,400

Equivalent units of production 107,210

Cost per equivalent unit 212,400 / 107,210 1.981

Kason Villegas · Answer 2

WIP = $8,200

Conversion costs = $204,200

Total = $212,400

Equivalent unit of conversion =

= 14900*90%+17900 * (1-20%) - (-93800) - 17,900 = 13,410+14,320+93,800-17,900 = 103,630

Cost per equivalent unit of conversion cost = 212,400/103,630 = $2.055

So the answer is A