Use the following information for Multiple-Choice Questions 2-13 through 2-18: Last year, Barnard Company incurred the following costs: Barnard produced and sold 10,000 units at a price of $31 each. 2-14 Refer to the information for Barnard Company above. Conversion cost per unit is a.$7.00. b. $20.00. c.$15.00. d. $5.00. e.$27.60.

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
Publisher: Cengage Learning
ISBN: 9781337115773

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
Publisher: Cengage Learning
ISBN: 9781337115773

Solutions

Chapter
Section
Chapter 2, Problem 14MCQ
Textbook Problem
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Use the following information for Multiple-Choice Questions 2-13 through 2-18:Last year, Barnard Company incurred the following costs:Barnard produced and sold 10,000 units at a price of $31 each.2-14Â Â Â Â Refer to the information for Barnard Company above. Conversion cost per unit is a.$7.00. b. $20.00. c.$15.00. d. $5.00. e.$27.60.

Expert Solution
To determine

Calculate the amount of conversion cost per unit.

Explanation of Solution

Conversion Cost Per Unit:

Conversion cost per unit can be defined as the ratio of conversion cost to the number of units produced and sold. Conversion cost can be defined as the summation of direct labor cost and manufacturing overhead.

c.

Use the following formula to calculate the conversion cost per unit:

ConversionÂ costÂ perÂ unit=ConversionÂ costUnitsÂ producedÂ andÂ sold

Substitute $150,000 for conversion cost and 10,000 units for units produced and sold in the above formula. ConversionÂ costÂ perÂ unit=$150,00010,000units=$15 The conversion cost per unit is$15

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