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 21,000 units in its beginning work in process inventory that were 70% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $134,200. An additional 87,000 units were started into production during the month. There were 22,000 units in the ending work in process inventory of the Welding Department that were 15% complete with respect to conversion costs. A total of $422,250 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.)

$6.470

$6.396

$4.728

$6.231

Explanation / Answer

Cost per equivalent unit for conversion costs:

= Total conversion costs/Equivalent units for conversion

= ($134,200+$422,250)÷(86,000+22,000×15%)

= $556,450÷89,300

= $6.231

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