Flagstone company uses a weighted-average process costing system. Company record

Question

Flagstone company uses a weighted-average process costing system. Company records disclosed that the firm completed 100,000 units during the month and had 20,000 units of work in process at month end which is 25% complete. Conversion costs related to the beginning work in process inventory amounted to $210,000, and amounts incurred during the current month totalled $840,000. If conversion is incurred uniformly throughout manufacturing, Flagstone’s equivalent-unit cost is:

            A. $10.50

            B. $10.00

            C. $9.00

            D. $8.40

            E. $7.88

Explanation / Answer

Equivalent units = 100000+(20000*25%) = 105000 Flagstone’s equivalent-unit cost=(210000+840000)/105000= $10 Option B is correct

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