Problem
Cambridge Company manufactures plastic bottles that it sells to organizations that manufacture bottled water. During the most recent month, there was no opening inventory. During the month, 25 million bottles were entered into production and 24 million were completed. The units in ending inventory were 100% complete with respect to materials costs and 60% complete with respect to conversion costs. During the month, materials costs were $500,000 and conversion costs were $246,000.
a) What was the number of equivalent units work done for conversion costs this month?
b) What was the cost per equivalent unit of conversion cost this month?
c) What is the cost that will be allocated to units completed and transferred out?
d) What is the cost that will be allocated to ending work in process?