Question

In: Accounting

A process's beginning work in process inventory has $6,000 in conversion costs. During the period 40,000...

A process's beginning work in process inventory has $6,000 in conversion costs. During the period 40,000 units are completed. Total period added $84,000 conversion costs. There are 15,000 units in work in process, one-third complete for conversion, at period -end. What is the cost per equivalent unit of production for conversion using weighted average method?

a. $0.50 per EUP

b. $1.87 per EUP

c. $2.00 per EUP

d.$2.10 per EUP

e. $2.25 per EUP

Solutions

Expert Solution

Correct answer----------------c. $2.00 per EUP

Working

Statement of Equivalent Units(Weighted average)
Conversion
Units Complete % Equivalent units
Transferred out              40,000 100%                   40,000
Ending WIP              15,000 33%                     5,000
Total              55,000 Total                   45,000

.

Cost per Equivalent Units (Weighted average)
COST Conversion
Beginning WIP Inventory Cost (A) $ 6,000
Cost incurred during period (B) $ 84,000
Total Cost to be accounted for (C=A+B) $ 90,000
Total Equivalent Units(D)              45,000
Cost per Equivalent Units (E=C/D) $ 2.00

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