. Dewey Company uses the weighted-average method in its process-costing system.
ID: 2381639 • Letter: #
Question
. Dewey Company uses the weighted-average method in its process-costing system. The first processing department, the Welding Department, started the month with 15,000 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 $19,200. An additional 86,000 units were started into production during the month. There were 13,000 units in the ending work-in-process inventory of the Welding Department that were 60% complete with respect to conversion costs. A total of $575,360 in conversion costs were incurred in the department during the month.The cost per equivalent unit for conversion costs is closest to A. $6.206. B. $6.400. C. $5.812. D. $6.69 . Dewey Company uses the weighted-average method in its process-costing system. The first processing department, the Welding Department, started the month with 15,000 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 $19,200. An additional 86,000 units were started into production during the month. There were 13,000 units in the ending work-in-process inventory of the Welding Department that were 60% complete with respect to conversion costs. A total of $575,360 in conversion costs were incurred in the department during the month.
The cost per equivalent unit for conversion costs is closest to . Dewey Company uses the weighted-average method in its process-costing system. The first processing department, the Welding Department, started the month with 15,000 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 $19,200. An additional 86,000 units were started into production during the month. There were 13,000 units in the ending work-in-process inventory of the Welding Department that were 60% complete with respect to conversion costs. A total of $575,360 in conversion costs were incurred in the department during the month.
The cost per equivalent unit for conversion costs is closest to A. $6.206. B. $6.400. C. $5.812. D. $6.69
Explanation / Answer
Units in beginning inventory were 15,000. 86,000 units were started during that month. This totals 15,000 + 86,000 = 101,000 units.
Of the 101,000 units, 13,000 units were left in the ending inventory and were 60% complete with respect to conversion costs. This is 13,000*0.60 = 7,800 equivalent units for conversion costs. The remaining units (101,000 – 13,000 = 88,000) are 100% complete, so they equal 88,000 equivalent units for conversion costs.
Total equivalent units for conversion costs the month is 7,800 + 88,000 = 95,800.
Conversion costs in the beginning inventory were 19,200. An additional $575,360 was added. Total costs are 19,200 + 575,360 = $594,560 for the month.
Cost per equivalent unit for conversion costs = $594,560/95,800 = $6.206 per equivalent unit.
Answer: A, $6.206.
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