Norfolk Engineering Uses the Weighted-Average Method in Its Process Costing

question 56

Multiple Choice

Norfolk Engineering uses the weighted-average method in its process costing system. This month, the beginning stock in the first processing department consisted of 700 units. The costs and percentage completion of these units in beginning stock were: $\begin{array}{lrr}&& \text { Percent}\\& \text { cost}& \text { complete}\\ \text { Materials costs } &£ 12,000& 65 \%\\ \text { Conversion costs } &£ 2,000 & 10 \%\\\end{array}$

A total of 9,200 units were started and 8,300 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: $\begin{array}{l}\text { Materials costs ............ }&£200,800 \\\text { Conversion costs ......... }&£225,500 \\\end{array}$

The ending stock was 75% complete with respect to materials and 15% complete with respect to conversion costs.
Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places.
- The cost per equivalent unit for conversion costs for the first department for the month is closest to:

• A)£26.64
• B)£26.41
• C)£27.97
• D)£22.98

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