David Corporation uses the weighted-average method in its process costing system. The first processing department, the...

David Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 20,000 units in its beginning work in process inventory that were 60% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $126,200. An additional 71,000 units were started into production during the month. There were 22,000 units in the ending work in process inventory of the Welding Department that were 10% complete with respect to conversion costs. A total of $398,250 in conversion costs were incurred in the department during the month. What would be the cost per equivalent unit for conversion costs for the month? (Round your final answer to 3 decimal places.)

1.$7.601

2.$7.387

3.$7.366

4.$5.593

Solutions

Expert Solution

Answer: 3. $7.366

Explanation

Weighted-average method

Units transferred to the next department = Units in beginning work in process + Units started
in to production – Units in ending work in process
= 20,000 + 71,000 - 22,000
= 69,000


	Conversion
Units transferred to the next department	69,000.00
Ending work in process:
Conversion: 22,000 units × 10%	2,200.00
Equivalent units of production	71,200.00


	Conversion ($)
Cost of beginning work in process inventory	126,200.00
Costs added during the period	398,250.00
Total cost (a)	524,450.00
Equivalent units of production (b)	71,200.00
Cost per equivalent unit (a) ÷ (b)	7.366

ekkarill92 answered 2 weeks ago

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