Kenney Co.uses process costing to account for the production of canned energy drinks.Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process.Equivalent units have been calculated to be 19,200 units for materials and 16,000 units for conversion costs.Beginning inventory consisted of $11,200 in materials and $6,400 in conversion costs.April costs were $57,600 for materials and $64,000 for conversion costs.Ending inventory still in process was 6,400 units (100% complete for materials,50% for conversion).The cost per equivalent unit for conversion costs using the weighted average method would be:
A)$4.00
B)$4.40
C)$1.10
D)$8.70

Question

Quizplus · Accepted Answer

To calculate the cost per equivalent unit for conversion costs using the weighted average method, we need to divide the total cost of conversion costs by the total equivalent units for conversion costs.
Total conversion costs = Beginning inventory of conversion costs + April conversion costs
= $6,400 + $64,000
= $70,400

Total equivalent units for conversion costs = Equivalent units for conversion costs for the current period + Equivalent units in ending inventory (adjusted for the degree of completion)
= 16,000 + (6,400 x 50%)
= 16,000 + 3,200
= 19,200

Cost per equivalent unit for conversion costs using the weighted average method = Total conversion costs / Total equivalent units for conversion costs
= $70,400 / 19,200
= $3.67 or $4.40 (rounded to the nearest cent)

Therefore, the best choice is B.

Kenney CoUses Process Costing to Account for the Production of Canned