Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department:
Units:
Beginning Inventory: 83,000 units, 70% complete as to materials and 25% complete as to conversion.
Units started and completed: 256,000.
Units completed and transferred out: 339,000.
Ending Inventory: 31,500 units, 40% complete as to materials and 10% complete as to conversion.
Costs:
Costs in beginning Work in Process - Direct Materials: $37,200.
Costs in beginning Work in Process - Conversion: $79,700.
Costs incurred in October - Direct Materials: $646,800.
Costs incurred in October - Conversion: $919,300.
Required:
1. Calculate the cost per equivalent unit of conversion.

Question

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Respuesta :

andromache andromache · Answer 1 · 2020-03-22T17:56:51+01:00

,Answer:

$2.92 per unit

Explanation:

The computation of the cost per equivalent unit of conversion unit is shown below:

= (Beginning conversion cost + conversion cost incurred) ÷ (conversion cost units)

where,

Beginning conversion cost = $79,700

Conversion cost incurred = $919,300

And, the conversion cost units is

= 339,000 units × 100% + 31,500 units × 10%

= 339,000 units + 3,150 units

= 342,150 units

So, the cost per equivalent cost is

= ($79,700 + $919,300) ÷ (342,150 units)

= $2.92 per unit