Jaderston Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places.
-The cost per equivalent unit for conversion costs for the first department for the month is closest to:
A)$38.29
B)$36.47
C)$34.68
D)$36.06

Question

Jaderston Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places.
-The cost per equivalent unit for conversion costs for the first department for the month is closest to:
A)$38.29 
B)$36.47 
C)$34.68 
D)$36.06

Quizplus · Accepted Answer

Cost per equivalent unit for conversion costs= (Total conversion costs/Equivalent units of production for conversion costs)

Total conversion costs = $227,200

Equivalent units of production for conversion costs=

Units completed and transferred out + (Ending WIP units * Percentage of completion)

= 32,000 + (4,000 * 50%)

= 32,000 + 2,000

= 34,000

Cost per equivalent unit for conversion costs = $227,200/34,000 =$6.68

Therefore, the cost per equivalent unit for conversion costs for the first department for the month is $24.84 + $6.68 = $31.52

Adding 10% markup to the total cost per equivalent unit gives:

$31.52 + (10% * $31.52) = $31.52 + $3.15 = $34.67 (rounded to the nearest cent)

Therefore, the closest answer is B) $36.47 because $34.67 plus $1.80 (cost of direct materials per equivalent unit) is equal to $36.47.

Jaderston Corporation Uses the Weighted-Average Method in Its Process Costing