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Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 1,400 units. The costs and percentage completion of these units in beginning inventory were:
Cost Percent Complete
Materials costs $6,700 65%
Conversion costs $7,800 45%
A total of 8,500 units were started and 6,900 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:
Cost
Materials costs $126,500
Conversion costs $208,000
The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs. The cost per equivalent unit for conversion costs for the first department for the month is closest to:_____.
a. $18.42.
b. $19.02.
c. $19.91.
d. $17.60.

Sagot :

Parrainidn

Answer: $27.14

Explanation:

First find the ending inventory:

= Beginning inventory + Units started - units transferred

= 1,400 + 8,500 - 6,900

= 3,000 units

Conversion EUP = Units transferred + (50% * ending inventory)

= 6,900 + (35% * 3,000)

= 7,950 units

Conversion cost per EUP:

= (Beginning conversion cost + month conversion cost) / EUP

= (7,800 + 208,000) / 7,950

= $27.14

The options are probably for another variant of this question.

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