1. What are the equivalent units for conversion in ending WIP? 2. What are the e

Question

1. What are the equivalent units for conversion in ending WIP?

2. What are the equivalent units of production for conversion?

3. What was the cost per equivalent unit for conversion costs for the month?

Larner Corporation uses the weighted-average method in its process costing system. Operating data for the first processing department for the month of June appear below: % Complete with respect to nv Units 24,000 Beginning work in process inventory Started into production during June Ending work in process inventory 40% 86,000 19,000 20% According to the company's records, the conversion cost in beginning work in process inventory was $68,064 at the beginning of June Additional conversion costs of $585,324 were incurred in the department during the month

Explanation / Answer

begining WIP Uints = 24000 & % of completion = 40%

hence WIP units during june from Beg. WIP = 24000*60% = 14400 Units actually converted from begining WIP

New Units introduced from June = 86000

Ending Inventory at june Last = 19000 in which Coversion pending = 20%

hence WIP units Converted during June = 19000*80 = 15200, balance 20% = 3800 will be converted in next month

Total WIP units chared for conversion cost = 14400 + 86000 -3800 = 96600

1. Equilent unit for Conversion in ending WIP = 19000*80 = 15200, balance 20% = 3800 will be converted in next month

2. total Equilent unit for production for conversion = 14400 + 86000 -3800 = 96600

3. Cost per equilent units = Total cost / Equilent No of unit

= $585,324 / 96600 = 6.05925  

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