Annenbaum Corporation uses the weighted-average method in its process costing sy

Question

Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 1,900 units. The costs and percentage completion of these units in beginning inventory were:

A total of 9,500 units were started and 7,400 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs.

The cost per equivalent unit for conversion costs for the first department for the month is closest to:

Cost Percent
Complete Materials costs $ 7,200 65% Conversion costs $ 8,300 45%

Explanation / Answer

Ending inventory units = 1900+9500-7400= 4000 Equivalent unit for conversion costs = 7400+(4000*35%)= 8800 Cost per equivalent unit for conversion costs = (8300+208500)/8800= $24.64 or $24.636

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