Use the following to answer questions:
Oliver Corporation's Department 2 had 1,600 units in the beginning inventory (60% complete for conversion costs) . During July, 14,000 units were started into production; 14,400 good units were transferred to Department 3 and 400 units were left in the ending inventory, which were 40% complete for conversion costs. All materials are added at the end of the process in Department 2. Units are inspected at the completion of the process, at which point spoiled units are identified and disposed of. The cost of spoiled units is written off as an abnormal expense during the period. The following costs were assigned to Department 2 during the period:
-If Department 2 uses weighted-average, what is the conversion cost per equivalent unit during July?
A) $7.73
B) $12.31
C) $11.53
D) $12.44
Correct Answer:
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