Use the information below to answer the following questions:
Goody Company adds direct materials at the beginning of the process and adds conversion costs throughout the process. The company uses the weighted-average method for process costing. Data for the finishing department follows:

-At the Goody Company the cost per equivalent unit for conversion costs would be closest to

Question

Use the information below to answer the following questions:
Goody Company adds direct materials at the beginning of the process and adds conversion costs throughout the process. The company uses the weighted-average method for process costing. Data for the finishing department follows:
 
-At the Goody Company the cost per equivalent unit for conversion costs would be closest to

Quizplus · Accepted Answer

To calculate the cost per equivalent unit for conversion costs, we need to divide the total conversion costs incurred during the period by the equivalent units of production for conversion costs.

Total conversion costs = $119,160 
Equivalent units of production for conversion costs = 24,000 (from the given data)

Cost per equivalent unit for conversion costs = Total conversion costs / Equivalent units of production for conversion costs 
= $119,160 / 24,000 
= $4.965 per equivalent unit

The closest option is C, $4.95.

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