Acompany uses the weighted average method for inventory costing. at the start of a period the production department had 20,000 units in beginning work in process inventory which were 40% complete; the department completed and transferred 165,000 units. at the end of the period, 22,000 units were in the ending work in process inventory and are 75% complete. the production department had conversion costs in the beginning goods is process inventory of $99,000 and total conversion costs added during the period are $726,825. compute the conversion cost per equivalent unit.

Answer

The cost per unit is 4.55 dollars.

Calculation

First we need to calculate equivalent production in order to determine cost per unit.

Equivalent production = Unit transfered out+ Closing units * % completion

                                     = 165,000 + 22,000*75%

                                     = 181,500

Now we can calculate cost per equivalent unit by dividing sum of opening inventory cost and total cost added during period with equivalant production calculated above.

Cost per equivalent = (99,000 + 726,825)/ 181,500

                                = 4.55

* In weighted average method for inventory valuation is opening stock lost it identity for per unit cost calculation.

two years ago, when picking flowers in the mountains back of yosemite valley, i found a book. it was blotted and storm-beaten; all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however; many of the inner pages were well preserved. and although all were more or less stained and torn, whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today; its granite pages have been torn and blurred by the same storms that wasted the castaway book.

two years ago, when picking flowers in the mountains back of yosemite valley; i found a book. it was blotted and storm-beaten, all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however, many of the inner pages were well preserved. and although all were more or less stained and torn; whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today, its granite pages have been torn and blurred by the same storms that wasted the castaway book.