Question

WILT U use process costing? (b) Lumdal Company uses the weighted average method in its process costing system. Operating data for the first processing department for the month of June appear below: Units Percentage complete Beginning work in process inventory ......... 10,000 90% Started into production during June .............. 75,000 Ending work in process inventory .................. 17,000 40% According to the company's records, the conversion cost in beginning work in process inventory was $77,490 at the beginning of June. Additional conversion costs of $552,062 were incurred in the department during the month. What was the cost per equivalent unit for conversion costs for the month?

Answer 1

Weighted Average Method Units transferred to Units in beginning work in process + Units started into the next department production - Units in ending work in process = 10,000 units + 75,000 units - 17,000 units = 68,000 units

Calculating cost per equivalent unit Conversion Units transferred to the next department 68,000 Plus Ending work in process 6,800 (Conversion : 17,000 X 40%) Equivalent unit of production 74,800 Cost of beginning work in process inventory $ Cost added during the period Total costs (a) Conversion 77,490 552,062 629,552 Equivalent unit of production (b) 74,800 Cost per equivalent unit (a)/(b) $ 8.416