Department F had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. Of the $12,500, $8,000 was for material and $4,500 was for conversion costs. 14,000 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710.
If the average cost method is used, the conversion cost per unit (to the nearest cent) would be
A) $3.71
B) $2.84
C) $2.97
D) $3.23

Question

Quizplus · Accepted Answer

The total conversion costs are the sum of beginning conversion costs ($4,500), direct labor ($32,450), and factory overhead ($18,710), totaling $55,660. The equivalent units for conversion are the units completed (15,000) plus the equivalent units in ending WIP (3,000 units * 75% = 2,250), totaling 17,250 equivalent units. The conversion cost per unit is $55,660 / 17,250 = $3.23.

Department F Had 4,000 Units in Work in Process That