Eban Corporation Uses the First-In, First-Out Method in Its Process

Eban Corporation uses the first-in, first-out method in its process costing system. The first processing department, the Welding Department, started the month with 24,000 units in its beginning work in process inventory that were 50% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $72,200. An additional 75,000 units were started into production during the month. There were 20,000 units in the ending work in process inventory of the Welding Department that were 20% complete with respect to conversion costs. A total of $324,160 in conversion costs were incurred in the department during the month.The cost per equivalent unit for conversion costs is closest to:

A) $4.57
B) $4.41
C) $5.60
D) $4.97

Correct Answer:

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