Question: An entity employs process costing for its inventory. Conversion costs are added uniformly at the end of the period while direct materials are added 100%

An entity employs process costing for its inventory. Conversion costs are added uniformly at the end of the period while direct materials are added 100% at the start of the production process. The following data are provided:

Beginning inventory	20,000 units (20% completed as to conversion
Units started during the year	80,000 units
Ending WIP inventory	10,000 units (60% incomplete as to conversion)

There is no spoilage during the period The cost of beginning inventory is P500,000 consisting of P200,000 costs of direct materials and P300,000 conversion costs. The total manufacturing cost is P2,200,000 consisting of P400,000 costs of direct materials and P1,800,000 conversion costs.

This Problem is associated with two questions: 1. What is the cost per unit for direct materials under FIFO process costing? 2. What is the conversion cost per unit for Average process costing? Question asked speccifically for this item is: What is the conversion cost per unit for Average process costing?

	a.	P23.33
	b.	P19.15
	c.	P20
	d.	P22.34

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