The accountant at John's Cycle Manufacturing Company uses the weighted-average costing method. The accountant reported that there were 400 equivalent units of work completed to date, and reported the following cost: 

 

 Summary of Total Costs 

Beginning work in progress (direct materials, $15,000 + conversion costs $6,000)	$21,000
Costs added during March (direct materials, $12,000 + conversion costs $18,000	$30,000
Total costs to account for in March	$51,000

 

 

 

 Required: 

 

 Compute the conversion cost-per-unit using the weighted-average costing method. 

 

 Under FIFO, ending work-in-process inventory comes from units that were started but not fully completed during the current period.  

 

 

 The weighted-average cost is the total of all costs entering the work-in process account divided by total equivalent units of work done to date. 

 

Managerial accountants base their choice between the weighted-average method and the first-in, first-out method based on a desired effect on taxes, operating income, performance evaluation, and debt covenants. 

 

 

 

 

 

 

 

 

 

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