Universal Automotive Group is a maker of engines for high performance cars and u

Question

Universal Automotive Group is a maker of engines for high performance cars and uses a process costing system. The following information pertains to the final department of manufacturing for Universal's most popular engine, the "Atomic 8". Beginning work-in-process (50% completed) 450 units Transferred-in 1,800 units Normal spoilage 110 units Abnormal spoilage 110 units Good units transferred out 1,570 units Ending work-in-process (28% completed) 460 units Conversion costs in beginning inventory $204,300 Current conversion cost $825,741 Universal Automotive Group calculates separate costs of spoilage by computing both normal and abnormal spoiled units. Normal spoilage costs are reallocated to good units and abnormal spoilage costs are charged as a loss. The units of the Atomic 8 that are spoiled are the result of defects not discovered before inspection of finished units. Using the weighted-average method, answer the following question: What are the unit conversion costs?   Universal Automotive Group is a maker of engines for high performance cars and uses a process costing system. The following information pertains to the final department of manufacturing for Universal's most popular engine, the "Atomic 8". Beginning work-in-process (50% completed) 450 units Transferred-in 1,800 units Normal spoilage 110 units Abnormal spoilage 110 units Good units transferred out 1,570 units Ending work-in-process (28% completed) 460 units Conversion costs in beginning inventory $204,300 Current conversion cost $825,741 Universal Automotive Group calculates separate costs of spoilage by computing both normal and abnormal spoiled units. Normal spoilage costs are reallocated to good units and abnormal spoilage costs are charged as a loss. The units of the Atomic 8 that are spoiled are the result of defects not discovered before inspection of finished units. Using the weighted-average method, answer the following question: What are the unit conversion costs?  

Explanation / Answer

Thus, Conversion cost per unit is $ 656.10

Statement of Cost per Equivelent Unit Conversion Cost in the beginning 2,04,300 Current Conversion Cost 8,25,741 Total Conversion Cost 10,30,041 No. of Units completed 1,570 Conversion cost per unit 656.1

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