Chapter 20, Problem S20A.15SE

To determine

Conversion Cost is a type of cost which is incurred to convert raw materials into finished product. It is the combination of direct labor and manufacturing overhead. Conversion cost is nothing but value added to the raw materials to make it sellable in the market.

Cost per Equivalent Unit is nothing but the cost of one complete unit which can be derived by dividing Total Cost incurred by total number of Equivalent Units produced.

Cost per Equivalent Unit = Total Cost/Total number of Equivalent Units

Where,

$\begin{array}{l}\text{Total Cost = Opening WIP }\text{}\text{Inventory Cost+Cost incurred during the month}\\ \text{Total number of Equivalent Units = Finished Goods+Closing WIP*\% of completion }\end{array}$

Requirement 1.

To Determine:

Conversion Cost in Filtration Department

To determine

Requirement 2:

To Determine:

Filtration Cost Per litre