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A company uses the weighted average method for inventory costing. At the start of a period...

A company uses the weighted average method for inventory costing. At the start of a period the production department had 38,000 units in beginning Work in Process inventory which were 49% complete; the department completed and transferred 174,000 units. At the end of the period, 31,000 units were in the ending Work in Process inventory and are 84% complete. The production department had conversion costs in the beginning work in process inventory of $98,000 and total conversion costs added during the period are $727,050. Compute the conversion cost per equivalent unit.

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Expert Solution

Cost of Prduction report (weighted avg method)
ProductionDepartment
Flow Of Units Physical Units Conversion Cost
Units to be accounted for
Beginning work in process inventory 38000
Units started this period 167000
Total u nits to be accounted for    205000
Units accounnted for:
Units transferred out (b) 174000 174000
Ending work in progress inventory c (100% material and 84% conversion) 31000 26040
Total units to be accounted for (f)      205000 200040
Flow of Cost
Cost in the begnning work in progress inventory 98000 98000
cost added to process 727050 $727,050
Total Cost to be accounted for (e)     825050 825050
Cost per equivalent unit (a)     4.124
rounded off to two decimal 4.12
ans $4.12
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ekkarill92 answered 2 years ago
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