Question

A pizza company produces frozen pizzas in three departments: assembly, freezing, and packaging. In assembly, crust ingredient are added at the beginning of the process. After the crust is made, the sauce, cheese, and toppings are added at the end of the process. Conversion costs are added evenly. Data for the assembly department includes: Beginring WIP Inventory 0 units 26,000 units 22500 unit 3,500 units $33,880 Units started Units tedjtranaferred to free zing WIP (65% through assembly) ning Crust ingredients added Cheese added Sauce and toppings Direct labor Manufacturing Overhead added $7,500 24,00 The cost per equivalent unit for conversion costs would be closest to $1.20. $1.00. O$1.30. $1.01

Answer 1

$1.20 per unit

Step-by-step explanation:

Given that,

Missing data table is attached with the answer.

Equivalent units for Conversion costs:

= Units completed + Ending work in process

= 22,500 units + (65% × 3,500 units)

= 22,500 units + 2,275 units

= 24,775 units

Total conversion costs:

= Direct labor + Manufacturing Overhead

= $24,000 + $5,730

= $29,730

Cost per equivalent unit for conversion costs:

= Total conversion costs ÷ Equivalent units for Conversion costs

= $29,730 ÷ 24,775 units

= $1.20