he Assembly Department of ByteSize, Inc., manufacturer of computers, incurred $ 260 comma 000 in direct material costs and $ 70 comma 000 in conversion costs. The equivalent units of production for direct materials and conversion costs are 1 comma 000 and 600 , respectively. The weightedminusaverage method is used. The cost per equivalent unit of production (EUP) for conversion costs is

Question

Elyse Glover

Business

21 February, 03:35

he Assembly Department of ByteSize, Inc., manufacturer of computers, incurred $ 260 comma 000 in direct material costs and $ 70 comma 000 in conversion costs. The equivalent units of production for direct materials and conversion costs are 1 comma 000 and 600 , respectively. The weightedminusaverage method is used. The cost per equivalent unit of production (EUP) for conversion costs is

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Chaim Alvarez · Answer 1

Cost per equivalent unit for conversion cost = $116.66

Explanation:

Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required to a complete a set of work is done in the period under consideration. So there is no separation of the completed units into opening inventory and fully worked.

To determine the cost per equivalent unit, we use the formula below:

Cost per equivalent unit = $70,000/600

= $116.66