Figure 5-5
The following information is available for Department A for the month of July: $\begin{array}{lr}
&\text { Units}&\text { Cost}\
\text { Work in progress, July } 1 \text { ( } 60 \% \text { complete) } & 5,000 \
\text { Direct materials } & &£ 12,000 \
\text { Conversion } && \underline{18,000} \
\text { Total work in progress, July 1 } && £ 30,000\
\
\text { Started in production during July}&20,000\
\

\text { Costs added:}\
\text { Direct materials}&&£ 36,000\
\text { Conversion}&&52,000\
\text { Total costs added during July}&&£88,000
\end{array}$ Work in progress, July 31, (40% complete) 2,000
Materials are added at the beginning of the process. (Round to two decimal places.)
-Refer to Figure 5-5. Department A's cost per equivalent unit of production for conversion using the weighted average method would be
A)£2.60.
B)£2.94.
C)£3.04.
D)£3.50.

Question

Figure 5-5
The following information is available for Department A for the month of July: $\begin{array}{lr}
&\text { Units}&\text { Cost}\
\text { Work in progress, July } 1 \text { ( } 60 \% \text { complete) } & 5,000 \
\text { Direct materials } & &£ 12,000 \
\text { Conversion } && \underline{18,000} \
\text { Total work in progress, July 1 } && £ 30,000\
\
\text { Started in production during July}&20,000\
\

\text { Costs added:}\
\text { Direct materials}&&£ 36,000\
\text { Conversion}&&52,000\
\text { Total costs added during July}&&£88,000
\end{array}$ Work in progress, July 31, (40% complete) 2,000
Materials are added at the beginning of the process. (Round to two decimal places.)
-Refer to Figure 5-5. Department A's cost per equivalent unit of production for conversion using the weighted average method would be
A)£2.60.
B)£2.94.
C)£3.04.
D)£3.50.

Quizplus · Accepted Answer

To calculate the cost per equivalent unit for conversion costs using the weighted average method, you first add the conversion costs in the beginning work in progress (£18,000) to the conversion costs added during the month (£52,000) to get a total of £70,000. Then, calculate the equivalent units for conversion: 5,000 units were 60% complete at the beginning, adding 3,000 equivalent units, plus 20,000 started and completed during the month, plus 2,000 units 40% complete at the end, adding 800 equivalent units, for a total of 23,800 equivalent units. Finally, divide the total conversion costs by the total equivalent units: £70,000 / 23,800 = £2.94.

Figure 5-5 the Following Information Is Available for Department a for the Month

Figure 5-5
the Following Information Is Available for Department a for the Month