A golf ball manufacturer gives us its data for the year WIP Inventory, January 1

Question

A golf ball manufacturer gives us its data for the year WIP Inventory, January 1 Units started Units completed and transferred out WIP Inventory. December 31 Direct materials 0 units 8,500 units 6,200 units 2,300 units $15,078 S6,700 $5,011 Direct labor Manufacturing Overhead Units in ending WIP Inventory were 90% complete for materials and 60% complete for conversion costs. On December 31, the cost per equivalent unit for conversion costs would be closest to O A. $1.82 . $1.42. O C. $088 OD, $1.54.

Explanation / Answer

Calculation of cost per equivalent unit for conversion cost units % Material % conversion cost unit transferred 6200 100% 6200 100% 6200 Ending WIP 2300 90% 2070 60% 1380 TOTAL 8500 8270 7580 Cost per Equivalent unit of Conversion = (6700+5011)/7580 = $1.54 As per the Above calculation Option "D" is the correct answer

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