Hache Corporation uses the weighted-average method in its process costing system
ID: 2339652 • Letter: H
Question
Hache Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 17,100 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 $7,560. An additional 89,200 units were started into production during the month and 92,200 units were completed in the Welding Department and transferred to the next processing department. There were 14,100 units in the ending work in process inventory of the welding Department that were 90% complete with respect to conversion costs. A total of $202,600 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: Multiple Choice $1.975 $2.210 $2.004Explanation / Answer
Correct Answer ---$2.004
Calculations
Units
Reconciliation of Units
A
Opening WIP
17,100
B
Introduced
89,200
C=A+B
TOTAL
106,300
D
Transferred
92,200
E=C-D
Closing WIP
14,100
Statement of Equivalent Units
Conversion Cost
Units
Complete %
Equivalent units
Transferred
92,200
100%
92,200
Closing WIP
14,100
90%
12,690
Total
106,300
Total
104,890
Cost per Equivalent Units
COST
Conversion Cost
Beginning WIP Inventory Cost
$ 7,560.00
Cost incurred during period
$ 202,600.00
Total Cost to be accounted for
$ 210,160.00
Total Equivalent Units
104,890
Cost per Equivalent Units
$ 2.004
Units
Reconciliation of Units
A
Opening WIP
17,100
B
Introduced
89,200
C=A+B
TOTAL
106,300
D
Transferred
92,200
E=C-D
Closing WIP
14,100
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