CAF-5 · Chapter 18 · Question 7 of 20
(Process Costing: Weighted Average & Variances) Opening WIP is 2,000 units (40% complete for conversion) valued at Rs. 12,000 for conversion. During the month, 12,000 units were started. Conversion costs incurred were Rs. 96,400. Closing WIP is 3,000 units (60% complete for conversion). Normal loss is 10% of total input (1,400 units). What is the cost per equivalent unit for conversion using the Weighted Average method?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 9.51
Explanation
Total output = 2,000+12,000-1,400-3,000 = 9,600 units. EU (Conv) = 9,600 (Completed) + 1,800 (Cl WIP: 3,000*60%) = 11,400. Total Conv Cost = 12,000 + 96,400 = 108,400. Cost per EU = 108,400 / 11,400 = Rs. 9.51.
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