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18 March, 05:36

The Blending Department of Luongo Company has the following cost and production data for the month of April.

Costs:

Work in process, April 1

Direct materials: 100% complete $118,000

Conversion costs: 20% complete 82,600

Cost of work in process, April 1 $200,600

Costs incurred during production in April

Direct materials $944,000

Conversion costs 430,700

Costs incurred in April $1,374,700

Units transferred out totaled 20,060.

Ending work in process was 1,180 units that are 100% complete as to materials and 40% complete as to conversion costs.

Required:

Compute the equivalent units of production for the month of April. for:

(a) materials

(b) conversion costs

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Answers (1)
  1. 18 March, 07:10
    0
    a) Materials = 21240

    b) Conversion Costs = 20532

    Explanation:

    (a) Material.

    For finding equivalent units = Units transferred out totaled + equivalent units = 20060 + 1180 = 21240

    Since, ending work in process was 100% complete

    (b) Conversion Costs

    For finding equivalent units = 20060 + (1180*0.4) = 20532

    Now, the ending work in process is 40% complete

    Here, materials and conversion are calculated separately to get the measure of productions from both perspectives. i. e. materials and conversion.

    Equivalent units are calculated to have estimate of how many product are being prepared in the process and their expected quantity.
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