ICAEW BIP · Chapter 3 · Question 5 of 8
During a period, 14,000 units were completed in a process and 2,000 units remained in closing work in progress. The closing work in progress was 100% complete for materials and 60% complete for conversion. There was no opening work in progress. Conversion costs were £91,200. What is the cost per equivalent unit for conversion?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) £6.00
Explanation
Equivalent units for conversion = completed units 14,000 + closing WIP (2,000 x 60%) 1,200 = 15,200. Cost per equivalent unit = £91,200 / 15,200 = £6.00.
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