tch were 30 cortile astodon ers on costs The d partient cong

tch were 30% cortile astodon ers on costs The d partient congleted 12000 ures darone pend ihe Department G had 3000 unts n work r, process at the bog nng of the per o depart ent had 2,000 unts nendr g work n process meni rywnch were 20% co plete as i n teg ons com ersen costs at the erdoftopere d Ai mate sete ode d at the b the department and the FIFO cost flow method is used to account for process costng purposes. The department had the following manudfacturing costs during the period nd oon Begnning Work in Process Inventory Drect Malerials Conversion Costs Curent Perod Costs Direct Matenals Conversion Cost 28 800 9,720 101,400 127 350 What is the cost per equrvalent unit for conversion costs for the departmen Select one O a $12 108 O b $11 2500 c$11 0540 $10 2702

Solution

Solution:

Beginning WIP inventory units = 3600 units

Units started and completed during the period = units completed during the period - beginning WIP Inventory units = 12000 -3600 = 8400 units

Ending WIP inventory units = 2000 units

Equivalent units for conversion = Beginning WIP inventory units*(100%-30%) + units started and completed during the priod *100% + ending WIP Inventory units *20%

= 3600*70% + 8400*100% + 2000*20% = 11,320 Equivalent units

Conversion cost per equivalent unit = current period conversion costs /Equivalent units for conversion

= $127350 / 11320 = $11.2500

Hence option b is correct.