Question

Hache Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 17,000 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 $7,480. An additional 89,000 units were started into production during the month and 92,000 units were completed in the Welding Department and transferred to the next processing department. There were 14,000 units in the ending work in process inventory of the Welding Department that were 90% complete with respect to conversion costs. A total of $202,400 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:

$1.965

$2.200

$2.007

$2.274

Answer 1

Answer is $ 2.007
Explanation:
UNITS TO ACCOUNT FOR:
Beginning Work in Process units				17,000
Add: Units Started in Process				89,000
Total Units to account for:				106,000
UNITS TO BE ACCOUNTED FOR:
Units started and completed				92,000
Ending Work in Process				14,000
Total Units to be accounted for:				106,000
Equivalent Units:
			Conversion
			% Completion	Units
Units started and completed			100%	92,000
Ending Work in Process			90%	12,600
Total Equivalent units				104,600
TOTAL COST TO ACCOUNT FOR:
			Conversion
Beginning work in Process			7,480
Cost Added during May			202,400
Total Cost to account for:			209,880
Total Cost to account for:
COST PER EQUIVALENT UNIT:
			Conversion
Total cost added during the year			209,880
Equivalent Units			104,600
Cost per Equivalent unit			2.007