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Fanciful Structures Company Uses the Weighted-Average Method in Its Process

question 41

Multiple Choice

Fanciful Structures Company uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 22,000 units in its beginning work-in-process inventory that were 20% complete with respect to conversion costs. The conversion cost in this beginning work-in-process inventory was $23,320. An additional 97,000 units were started into production during the month and 101,000 units were completed in the Welding Department and transferred to the next processing department. There were 18,000 units in the ending work-in-process inventory of the Welding Department that were 40% complete with respect to conversion costs. A total of $529,380 in conversion costs were incurred in the department during the month.
What would be the cost per equivalent unit for conversion costs for the month? (Round your answer to 3 decimal places.)

Definitions:

Total Fixed Cost

The sum of all costs that do not change with the level of output, such as rent, salaries, and insurance premiums.

Short Run

A period in which at least one factor of production is fixed, limiting the ability of a business to adjust to changing market conditions fully.

Variable Cost

A cost that increases when the firm increases its output and decreases when the firm reduces its output.

Average Total Cost

The total cost divided by the number of units produced, representing the average cost of production per unit.