Darden Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 18,000 units in its beginning work in process inventory that were 10% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $16,200. An additional 84,000 units were started into production during the month. There were 17,000 units in the ending work in process inventory of the Welding Department that were 70% complete with respect to conversion costs. A total of $836,880 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs for the month is closest to:
A) $8.286
B) $9.000
C) $8.804
D) $9.963

Question

Quizplus · Accepted Answer

Step 1: Calculation of Equivalent Units of Production

Units:
Beginning work in process inventory = 18,000
Units started into production = 84,000
Total units = 102,000

Conversion Costs:
Beginning work in process inventory = $16,200
Conversion costs incurred during the month = $836,880
Total conversion costs = $853,080

Equivalent Units of Production:
Units in beginning work in process inventory = 18,000 x 10% = 1,800
Units started into production = 84,000
Units in ending work in process inventory = 17,000 x 70% = 11,900
Total equivalent units of production = 97,700

Step 2: Calculation of Cost per Equivalent Unit of Production for Conversion Costs

Cost per equivalent unit of production = Total conversion costs / Equivalent units of production
Cost per equivalent unit of production = $853,080 / 97,700
Cost per equivalent unit of production = $8.804 (rounded to the nearest cent)

Therefore, the cost per equivalent unit for conversion costs for the month is closest to option C: $8.804.

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