Question

The Rolling Department of Keystone Steel Company had 400 tons in beginning work in process inventory (20% complete). During the period, 7,900 tons were completed. The ending work in process inventory was 1,000 tons (30% complete).

What are the total equivalent units for conversion costs?

units

Answer 1

Computation of total equivalent units for conversion costs:

In the opening work in progress, 20% work is already completed and hence, only 80% will be left to be completed in this year now.

Equivalent units for conversion cost from opening work in progress = 400 tons * 80% = 320 tons

From the 7,900 tons completed, 400 units comprise from the opening work in progress and the units that were started and completed during the perios = (7,900 - 400) * 100% = 7,500 units

In the Closing work in progress, 30% work is completed and hence, only 30% will be taken in equivalent units in this year .

Equivalent units for conversion cost from closing work in progress = 1,000 tons * 30% = 300 tons

Therefore, total equivalent units for conversion costs = 320 tons + 7,500 tons + 300 tons = 8,120 units