Question

Department F had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. Of the $12,500, $8,000 was for material and $4,500 was for conversion costs. 14,000 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710.If the average cost method is used, the conversion cost per unit (to the nearest cent) would be

Answer 1

Answer:

$ 3.226

Explanation:

Data provided:

Total units completed during the period = 15,000

Additional units completed at the end of the period = 75% of 3,000 = 2,250

Conversion cost = $ 4,500

Direct labor cost = $ 32,450

factory overhead = $ 18,710

Therefore the total conversion cost = $ 4,500 + $ 32,450 + $ 18,710

= $ 55,660

Now,

The total number of units converted = 15,000 + 2,250 = 17,250

Hence,

Conversion cost per unit = ( Total Cost of conversion ) / ( units completed)

= ( 55,660 ) / 17250

or

= $ 3.226