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8 April, 14:34

Multiple Choice Question 60 A department adds all raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of January, there were no units in the beginning work in process inventory; 89800 units were started into production in January; and there were 19000 units that were 35% complete in the ending work in process inventory at the end of January. What were the equivalent units of production for conversion costs for the month of January?

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  1. 8 April, 16:12
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    Equivalent units = 77, 450 units

    Explanation:

    Equivalent units are notional whole units which represent incomplete work which are used to apportion costs between between work in progress and completed work.

    To compute as

    Equivalent Units = Degree of completion (%) * units

    Completed units in the period with 100% work done is equal

    = units started in the period - closing inventory

    = 89,800 - 19,000

    = 70,800 units

    Item Equivalent units

    Completed units (100% * 70,800) 70,800

    Closing inventory (35% * 19,000) 6,650

    Total equivalent units 77,450

    Total equivalent units = 70,800 + 6,650 = 77, 450 units
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