Almondz Co. has equivalent costs for Direct Materials (DM) of $77,626 and equivalent costs for Conversion Costs (CC) of $86,777 for the month of July. They reported the following information for July:
Almondz uses the Weighted-Average method for their process costing. What is the equivalent cost per unit for Conversion Costs?
(Round units to whole number and cost to two decimal places.)

Question

Almondz Co. has equivalent costs for Direct Materials (DM) of $77,626 and equivalent costs for Conversion Costs (CC) of $86,777 for the month of July. They reported the following information for July:
 Almondz uses the Weighted-Average method for their process costing. What is the equivalent cost per unit for Conversion Costs?
(Round units to whole number and cost to two decimal places.)

Quizplus · Accepted Answer

This question requires calculation of the equivalent units for Almondz using the Weighted-Average method. This method does not account for beginning Work-in-Progress (WIP) Inventory separately. The units are calculated as follows: (60,740 × 100%) + (9,860 × 89%) = 60,740 + 8,775 = 69,515 units. To calculate the equivalent cost per unit, divide the equivalent costs by the number of units just calculated. $86,777/69,515 = $1.25.