David Corporation uses the weighted-average method in its process costing system

Question

David Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 20,000 units in its beginning work in process inventory that were 75% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $140,200. An additional 99,000 units were started into production during the month. There were 20,000 units in the ending work in process inventory of the Welding Department that were 20% complete with respect to conversion costs. A total of $440,250 in conversion costs were incurred in the department during the month. What would be the cost per equivalent unit for conversion costs for the month? (Round your final answer to 3 decimal places.)

$5.635

$5.863

$6.863

$4.274

David Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 20,000 units in its beginning work in process inventory that were 75% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $140,200. An additional 99,000 units were started into production during the month. There were 20,000 units in the ending work in process inventory of the Welding Department that were 20% complete with respect to conversion costs. A total of $440,250 in conversion costs were incurred in the department during the month. What would be the cost per equivalent unit for conversion costs for the month? (Round your final answer to 3 decimal places.)

Explanation / Answer

David Corporation Details Units % Conversion Equivalent Units of Conversion Opening WIP            20,000 75%               15,000 Started Into Production            99,000               88,000            103,000 Output Completed & Transferred            99,000 100%               99,000 Closing WIP            20,000 20%                 4,000 Total Units          119,000            103,000 Total Cost of conversion Opening WIP          140,200 Incurred During month          440,250 Total Cost of conversion          580,450 Total Equivalent units of conversion          103,000 Cost per equivalent unit of conversion $          5.635

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