The debits to Work in Process-Assembly Department for April, together with data concerning production, are as follows: April 1, work in process:
All direct materials are added at the beginning of the process, and the first-in, first-out method is used to cost inventories.The conversion cost per equivalent unit for April is
A)$2.48
B)$2.75
C)$2.50
D)$5.25

Question

The debits to Work in Process-Assembly Department for April, together with data concerning production, are as follows: April 1, work in process:
 All direct materials are added at the beginning of the process, and the first-in, first-out method is used to cost inventories.The conversion cost per equivalent unit for April is
A)$2.48 
B)$2.75 
C)$2.50 
D)$5.25

Quizplus · Accepted Answer

To calculate the conversion cost per equivalent unit, we need to divide the total conversion costs incurred in April by the equivalent units of production.

Total conversion costs incurred in April = $137,500 
Equivalent units of production = 
(Units completed and transferred out) + (Equivalent units in ending work in process) 
= 47,000 + (4,000 × 60%)
= 47,000 + 2,400
= 49,400

Conversion cost per equivalent unit for April = $137,500 ÷ 49,400 = $2.78 (approximate)

Since the question asks for the answer to the nearest $0.25, the closest option is B) $2.75.

The Debits to Work in Process-Assembly Department for April, Together