Question

Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department:

Units:
Beginning Inventory: 46,000 units, 100% complete as to materials and 60% complete as to conversion.
Units started and completed: 150,000.
Units completed and transferred out: 196,000.
Ending Inventory: 40,000 units, 100% complete as to materials and 25% complete as to conversion.

Costs:
Costs in beginning Work in Process - Direct Materials: $63,000.
Costs in beginning Work in Process - Conversion: $68,850.
Costs incurred in February - Direct Materials: $420,600.
Costs incurred in February - Conversion: $619,150.

Calculate the cost per equivalent unit of conversion.

Answer 1

Answer :

$236,000 is cost per equivalent unit of conversion.

explanation :

	Sparkey Corporation
	Production cost record
	Molding section
		details of Physical units(PU) & equivalent units(EU) estimation
		Units to be valuedfor	PU
		Units in the starting WIP itemization	46000
		Units during the period	190000
		Total units to be valuedfor	236000
				EU
		Units valuedfor	PU	Material	Conversion
		Units finished and trasmitted out	196000	196000	196000
		Units in ending WIP inventory	40000	40000	16000
		Total units valuedfor	236000	236000	212000
		details of amount to be valued for
		Costs to be valuedfor	Materials	Conversion	Total
		Cost in starting WIP	63,000	68850	131,850
		Costs incurred during the period	307000	619150	926150
		Total costs to be valuedfor	370,000	688,000	1,058,000
		estimation of costs per EU
			Materials	Conversion
		Total costs to be valued for(a)	370,000	688,000
		Total equivalent units valued for(b)	236,000	212,000
		Cost per EU(a)/(b)	1.56779661	3.25
		EU of PRODUCTS	236000
		Answer: 236,000