Duff's Baking Company (DBC) produces Monster cookies.DBC's beginning inventory has 22,000 Monster cookies that are 100% complete as to materials and 30% complete as to conversion costs.During the month,380,000 Monster cookies were started into production.Ending inventory is 35,000 cookies which are 100% complete as to materials and 40% complete as to conversion costs.Beginning work in process inventory consisted of $78,450 of which $31,600 was materials and $46,850 was conversion costs.Materials added during the month were $290,000 while conversion costs during the month totaled $353,200.Which is not true for DBC for the month?

A) The units accounted for total 402,000
B) The unit cost for materials is $0.80
C) Equivalent units for materials total 402,000
D) Equivalent units for conversion costs total 381,000
E) The unit cost for conversion costs is $.995

Question

Vaibhav Sharma · Accepted Answer

Final Answer : E, Explanation :  The unit cost for conversion costs is calculated by dividing the total conversion costs by the equivalent units for conversion costs. The equivalent units for conversion costs are 381,000, and the total conversion costs are $400,050 ($46,850 + $353,200). Thus, the unit cost for conversion costs is $400,050 / 381,000 = $1.05, not $0.995.

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