The Rainbow Paint Co. uses a process-costing system. Materials are added at the beginning of the process and conversion costs are incurred uniformly. Work in process at the beginning of the month is 40 % complete; at the end, 20%. One gallon of material makes one gallon of product. Data follows:
Beginning inventory 550 gal
Direct material added 7,150 gal
Ending inventory 400 gal
Conversion cost incurred $35,724
Cost of direct materials added $65,340
Conversion costs, beginning inventory $1,914
Cost of direct materials, beginning inv. $3,190
Use the weighted average method. Prepare a schedule of the output in equivalent units for materials and conversion costs.
Equivalent units of material __________
Equivalent units of conversion costs ___________
What costs should be included in WIP for direct materials and conversion costs. material ____________; conversion costs _____________.
Calculate the cost per equivalent unit
Material ___________ conversion cost __________.