Darden corporation uses the weighted-average method in its process costing system. the first processing department, the welding department, started the month with 21,000 units in its beginning work in process inventory that were 10% complete with respect to conversion costs. the conversion cost in this beginning work in process inventory was $23,700. an additional 99,000 units were started into production during the month. there were 32,000 units in the ending work in process inventory of the welding department that were 70% complete with respect to conversion costs. a total of $851,880 in conversion costs were incurred in the department during the month. the cost per equivalent unit for conversion costs for the month is closest to:
a. $8.486b. $9.965c. $8.738d. $9.200

cost per equivalent unit of conversion cost = 7.93

close to a 8.486

Explanation:

given data

beginning in = 21000

additional unit started = 99000

inventory = $23700

ending work = 32000

conversion costs =  $851880

to find out

The cost per equivalent unit for conversion costs for the month

solution

we find here first unit transfer out that is express as

unit transfer out = beginning work in + additional unit started - ending work in

unit transfer out = 21000 + 99000 -  32000 = 88000 unit

and

equivalent unit are here express as

equivalent unit = unit transfer out + ending work in × completion %

equivalent unit = 88000 + (32000  × 70 % )

equivalent unit = 110400 units

and  

we know cost per equivalent unit of conversion cost =

here total cost is = 23700 + 851,880 = $875580

cost per equivalent unit of conversion cost =

cost per equivalent unit of conversion cost = 7.93

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