The debits to Work in Process-Assembly Department for April,together with data concerning production,are as follows:
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: ​
 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 know the total conversion cost incurred during the month of April and the equivalent units of production for that month.

Total conversion cost = Direct labor + Manufacturing overhead
= $276,000 + $312,000
= $588,000

To calculate the equivalent units of production, we need to consider both the completed units and the partially completed units in the ending work in process inventory.

Equivalent units of production = Completed units + (Ending work in process inventory * Percentage completion)
= 20,000 + (6,000 * 60%)
= 23,600

Conversion cost per equivalent unit = Total conversion cost / Equivalent units of production
= $588,000 / 23,600
= $24.87 per unit

Therefore, the conversion cost per equivalent unit for April is $2.75 (rounded to the nearest cent). The correct answer is B.

The Debits to Work in Process-Assembly Department for April,together with Data