Question

Lanjan Corporation uses the weighted average method in its process costing system. Operating data for the first processing department for the month of June appear below: Percent Complete with Respect to Conversion 50% Beginning work in process inventory Started into production during June Ending work in process inventory Units 14,000 76,000 20,000 10% According to the company's records, the conversion cost in beginning work in process inventory was $92,218 at the beginning of June. Additional conversion costs of $571,618 were incurred in the department during the month. What was the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)

Answer 1

Units transferred to the next department = Beginning work in process inventory + units Started into production - Ending work in process inventory

= 14,000 + 76,000 - 20,000

= 70,000

	Conversion
Units transferred to the next department	70,000
(+) Ending work in process inventory : Conversion : 20,000* 10%	2,000
Equivalent units of production	72,000

Cost in beginning work in process inventory	$92,218
(+) Additional conversion cost	$571,618
Total cost	$663,836
Equivalent units of production	72,000
Cost per equivalent unit (Total cost / Equivalent units of production)	9.220