Diston Company uses the weighted-average method in its process costing system. T
ID: 2459531 • Letter: D
Question
Diston Company uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 22,000 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 $58,260. An additional 126,000 units were started into production during the month. There were 27,000 units in the ending work in process inventory of the Welding Department that were 10% complete with respect to conversion costs. A total of $777,970 in conversion costs were incurred in the department during the month.
Diston Company uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 22,000 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 $58,260. An additional 126,000 units were started into production during the month. There were 27,000 units in the ending work in process inventory of the Welding Department that were 10% complete with respect to conversion costs. A total of $777,970 in conversion costs were incurred in the department during the month.
Explanation / Answer
Equilent Unit completed and transferd out (22000+126000-27000) 121000 WIP end of year 27,000 % of Completion 10% Equivalent Unit (27000*10%) 2700 Equivalent Unit of production (121000+2700) 123700 Cost of WIP 58,260 Cost incurred during the month 777,970 Total Cost (777970+58260) 836,230 Cost per Equilent unit (836230/123700) 6.760