Gilmore Company manufactures tape dispensers.Its Assembly department had the following output and costs: Units started and completed $\quad 70,000$
$\begin{array} { l l } \text { Started and in process } & 10,000 \end{array}$ These units had all materials added but were only 40% complete as far as conversion costs.Direct materials costs were $480,000; conversion costs were $240,000.The unit cost of conversion costs is _____.

Question

Quizplus · Accepted Answer

The total conversion costs are $240,000. To find the unit cost of conversion costs, divide the total conversion costs by the equivalent units for conversion. The equivalent units for conversion are the 70,000 units completed plus 40% of the 10,000 units started but not completed, which equals 70,000 + (10,000 * 0.4) = 74,000 units. Therefore, the unit cost of conversion costs is $240,000 / 74,000 = $3.24.

Gilmore Company Manufactures Tape Dispensers 70,000\quad 70,00070,000 Started and in process 10,000\begin{array} { l l } \text { Started and in process } & 10,000 \end{array} Started and in process ​10,000​

Gilmore Company Manufactures Tape Dispensers $\quad 70,000$ $\begin{array} { l l } \text { Started and in process } & 10,000 \end{array}$