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16 March, 00:37

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

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  1. 16 March, 03:03
    0
    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
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