Luna Manufacturing uses a process costing-system. Luna uses the weighted average method. The following information pertains to operations for the month of January: Units Beginning work-in-process inventory, January 1 14,000 Started in production during January 370,000 Completed production during January 187,000 Ending work-in-process inventory, January 31 197,000 The beginning inventory was 80% complete for materials and 40% complete for conversion costs. The ending inventory was 85% complete for materials and 30% complete for conversion costs. Costs pertaining to the month of January are as follows: Beginning inventory costs are: materials of $152,800 and conversion cost of $165,600. Costs incurred during January are: materials used of $1,849,200 and conversion cost of $2,410,800. What is the conversion cost per equivalent unit for December, rounded to two decimal places?

Question

Business

Omar Miranda

11 April, 14:31

Luna Manufacturing uses a process costing-system. Luna uses the weighted average method. The following information pertains to operations for the month of January: Units Beginning work-in-process inventory, January 1 14,000 Started in production during January 370,000 Completed production during January 187,000 Ending work-in-process inventory, January 31 197,000 The beginning inventory was 80% complete for materials and 40% complete for conversion costs. The ending inventory was 85% complete for materials and 30% complete for conversion costs. Costs pertaining to the month of January are as follows: Beginning inventory costs are: materials of $152,800 and conversion cost of $165,600. Costs incurred during January are: materials used of $1,849,200 and conversion cost of $2,410,800. What is the conversion cost per equivalent unit for December, rounded to two decimal places?

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Elliot Dorsey · Answer 1

conversion cost per equivalent unit: 10.47

Explanation:

Luna uses the weighted average method:

complete units + equivalent units ending WIP

Completed during the period 187,000

ending WIP 197,000 x 30% = 59,100‬

Equivalent units 246,100‬

cost: beginning invenotry + added during the period

165,600 + 2,410,800 = 2,576,400‬

cost per equivalent unit: cost / equivalent untis

2,576,400 / 246,100 = 10,4689 = 10.47