Jemsen 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) $19.28
B) $21.23
C) $22.29
D) $20.53

Question

Jemsen 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) $19.28 
B) $21.23 
C) $22.29 
D) $20.53

Quizplus · Accepted Answer

To calculate the cost per equivalent unit for conversion costs using the weighted-average method, we need to divide the total conversion costs by the equivalent units of production.

Total Conversion Costs = Direct Labor + Manufacturing Overhead
Total Conversion Costs = $151,820 + $201,011
Total Conversion Costs = $352,831

Equivalent Units of Production = Units Completed and Transferred Out + Equivalent Units in Ending Work in Process Inventory
Equivalent Units of Production = 80,000 + 30,000
Equivalent Units of Production = 110,000

Cost per Equivalent Unit for Conversion Costs = Total Conversion Costs / Equivalent Units of Production
Cost per Equivalent Unit for Conversion Costs = $352,831 / 110,000
Cost per Equivalent Unit for Conversion Costs = $3.207

Therefore, the cost per equivalent unit for conversion costs for the first department for the month is closest to $21.23 (option B).

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