Darden Corporation uses the weighted-average method in its process costing syste

Question

Darden 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 10% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $21,200. An additional 94,000 units were started into production during the month. There were 27,000 units in the ending work in process inventory of the Welding Department that were 70% complete with respect to conversion costs. A total of $846,880 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:

Explanation / Answer

Units transferred = 20000+94000-27000= 87000 Equivalent unit for conversion costs = 87000+(27000*70%)= 105900 Cost per equivalent unit for conversion costs = (21200+846880)/105900= $8.20 or $8.197

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