Question

Hache Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 17,600 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 $7,960. An additional 90,200 units were started into production during the month and 93,200 units were completed in the Welding Department and transferred to the next processing department. There were 14,600 units in the ending work in process inventory of the Welding Department that were 90% complete with respect to conversion costs. A total of $203,600 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:

Answer 1

• Working

EUP - Weighted Average Method	Units	% Conversion	EUP - Conversion
Units TRANSFERRED	93,200	100%	93,200
Units of ENDING WIP	14,600	90%	13,140
Equivalent Units of Production			106,340
COST per EUP			Conversion
Cost of Beginning WIP			$                                    7,960.00
Cost incurred during the period			$                                203,600.00
Total Costs		Costs	$                                211,560.00
Equivalent units of production		EUP	106,340
Cost per EUP			$                                      1.98947 or $ 1.99

• Correct Answer:
  Cost per EU for conversion cost is closest to $ 1.99 or $ 2.00