Diston Company uses the weighted-average method in its process costing system. T

Question

Diston Company uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 18,000 units in its beginning work in process inventory that were 30% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $44,820. An additional 90,000 units were started into production during the month. There were 21,000 units in the ending work in process inventory of the Welding Department that were 10% complete with respect to conversion costs. A total of $677,970 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 off to three decimal places.)

$8.112

$8.300

$7.533

$6.108

$8.112

$8.300

$7.533

$6.108

Explanation / Answer

Units transferred out = 18000+90000-21000 = 87000 units

Equivalent unit of conversion = (87000*100%+21000*10%) = 89100 Units

Cost per equivalent unit of conversion = (44820+677970)/89100 = 8.112

So answer is a) $8.112

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