Question

Department w had 2,400 units, one-third completed at the beginning of the period; 16,000 units were transferred to department x from department w during the period; and 1,800 units were one-half completed at the end of the period. assume the completion ratios apply to direct materials and conversion costs. what is the equivalent units of production used to compute unit conversion cost on the cost of production report for department w? assume the company uses fifo.

Answer 1

The equivalent units of production used to compute unit conversion cost on the cost of production report for department w should be:

equivalent units of production = 16,000 units + (2/3) * 2,400 units

equivalent units of production = 17,600 units

The 1800 units are 1/2 completed but it doesn’t say what they're assigned to therefore we don’t use that in the calculation.

ANSWER: 17,600 units