Question

Equivalent Units of Conversion Costs

The Rolling Department of Kraus Steel Company had 2,370 tons in beginning work in process inventory (80% complete) on October 1. During October, 39,500 tons were completed. The ending work in process inventory on October 31 was 3,160 tons (40% complete).

What are the total equivalent units for conversion costs? Round to the nearest whole unit.

Answer 1

SOLUTION:
	CALCULAITON OF THE EQUIVALENT UNITS OF PRODUCTION
		Conversion Costs
		Units	% Complete	Equivalent Units
	Beginning inventory	2370	20%	474
	Add: Introduced and Completed during the month of October	37130	100%	37130
	Ending , Work-in-process	3160	40%	1264
	Total Equivalent units			38868
	Answer = Total equvalent unit of conversion costs = 36,868 Units
WORKING NOTES: 1
	CALCULATION OF NO. OF UNITS STARTED DURING THE MONTH
	Closing Stock	3160	Tons
	Add: Completed Units	39500	Tons
	Total	42660	Tons
	Less: Beginning Units	2370	Tons
	Unit introduced in the month	40290	Tons
WORKING NOTES: 2
	CALCULATION OF NO. OF UNITS FINSHIED IN THE MONTH OF OCTOBER
	Total Units Completed during the month =	39500	Tons
	Less: Beginning inventory completed	2370	Tons
	Units introduced and completed during the month	37130	Tons