Question

A department uses the weighted average method of process costing. All direct materials are added at the beginning of the process. This department has the following data for this month.

• 117 units in beginning WIP (44% complete with respect to conversion costs).
• 9,169 units started
• 215 units in ending WIP (31% complete with respect to conversion costs).
• $1,561 beginning WIP direct materials costs
• $1,097 beginning WIP conversion costs
• $89,169 current month direct materials costs
• $102,511 current month conversion costs

What is the department's conversion cost per equivalent unit for this month (round final answer to nearest cent if necessary)?

Answer 1

Cost per Equivalent Unit of Production
					Materials		Conversion
Beginning costs					$         1,561.00		$     1,097.00
During the month costs					$      89,169.00		$ 102,511.00
Total cost				Costs	$      90,730.00	Costs	$ 103,608.00
÷	Equivalent units of production			EUP	9286	EUP	9137.65
Cost per equivalent unit of production					$                9.77		$           11.34

Answer: $ 11.34

Workings:

Equivalent Units of Production (EUP) - Weighted Average Method
				Units	% Mat.	EUP- Mat.	% Conv.	EUP- Conv.
Units completed and transferred out				9071	100%	9071	100%	9071
Units in ending inventory				215	100%	215	31%	66.65
Equivalent units of production						9286		9137.65