In: Accounting
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
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 |