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25 April, 09:10

Limber Company uses the weighted-average method in its process costing system. Operating data for the first processing department for the month of June appear below: According to the company's records, the conversion cost in beginning work in process inventory was $15,264 at the beginning of June. Additional conversion costs of $68,208 were incurred in the department during the month. What was the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)

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  1. 25 April, 10:15
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    Limber Company uses the weighted-average method in its process costing system. Operating data for the first processing department for the month of June appear below:

    Unit % of completion

    Beginning working in progress 18,000 80%

    Started into production 81,000

    Ending working progress 17,000 * 80%

    According to the company's records, the conversion cost in beginning work in process inventory was $15,264 at the beginning of June. Additional conversion costs of $68,208 were incurred in the department during the month. What was the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)

    Answer:

    cost per equivalent unit for conversion costs = $0.873

    Explanation:

    Completed units = opening inventory + started unit - closing inventory

    = 18000 + 81,000 - 17,000 = 82,000 units

    Item units Equivalent unit

    Completed units 82,000 100% * 82,000 = 82,000

    Production 17,000 80% * 17,000 = 13600

    Total equivalent unit 95,600

    Cost per equivalent unit = total conversion cost / total equivalent units

    = ($15,264 + $68,208) / 95,600 units = $0.873

    cost per equivalent unit for conversion costs=$0.873
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