Limber Company uses the weighted-average method in its process costing system. Operating data for the first processing department for the month of June appear below:
                           Unit       % of completion Â
Beginning working in progress   18,000        80%
Started into production       81,000
Ending working progress        17,000       * 80%
According to the company's records, the conversion cost in beginning work in process inventory was $15,264 at the beginning of June. Additional conversion costs of $68,208 were incurred in the department during the month. What was the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)
Answer:
cost per equivalent unit for conversion costs = $0.873
Explanation:
Completed units= opening inventory + started unit - closing inventory
= 18000 + 81,000 - 17,000 = 82 ,000 units
Item            units                      Equivalent unit
Completed units  82,000      100% × 82,000 = 82,000
Production       17,000      80% ×17,000  =  13600
Total equivalent unit                        95,600
Cost per equivalent unit= total conversion cost / total equivalent units
= Â ($15,264 + $68,208)/95,600 Â units = Â $0.873
cost per equivalent unit for conversion costs=$0.873
