Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory...

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Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory...

Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 1,600 units. The costs and percentage completion of these units in beginning inventory were:

	Cost		Percent Complete
Materials costs	$	6,900		65%
Conversion costs	$	8,000		45%

A total of 8,900 units were started and 7,100 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	$	126,700
Conversion costs	$	208,200

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:

Garrison 16e Rechecks 2017-09-08

Multiple Choice

$22.56
$20.43
$26.08
$25.36

business accounting

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Answer 1

Answer #1

Ans: Annenbaum Corporation uses the weighted-average method in its process costing system.

Total conversion cost = $208,200 + $8000

= $216,200

Total unit entered in First Process 8900 units

Unit transfer to second process is 7100 units

Unit in still processing in first process is 1800 units (8900 - 7100) which is 35 % completed

So equivalent units with 100% conversion cost is 630 units ( 1800 *35%)

So unit equivalent units produced in First process = 7100 units + 630 units

= 7730 units

So weighted average conversion cost per unit = $216,200/ 7730 units

= $ 27.94

So the nearest conversion cost in the option is $ 26.08 is the correct answer

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Answer 2

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