Answer:
Equivalent units
Materials = 12,700 units
Conversion cost = 11,940 units
Explanation:
<em>Equivalent Units E.U) are notional whole units which represent incomplete work and are used to apportion costs between between work in progress and completed work.</em>
<em>Equivalent Units = Degree of completion (%) × units</em>
<em>We will use the weighted average method</em>
<em>Weighted average method</em>
<em>The weighted average method of valuation of work in progress does not separate opening work-in progress from the newly introduced.</em>
<em>Using the weighted average method</em>
<em />
<em>Equivalent unit for material cost</em>
Since direct materials are added at the the beginning of the production process the equivalent unit of direct material
EU = (100% × 10,800) + (100% ×1900) = 12700
<em>Note that 100% represent the degree of completion.</em>
<em />
Equivalent unit for conversion cost
<em>Item Equivalent unit</em>
Transferred out 100%× 10,800 = 10,800
Closing inventory 60% ×1900 = <u> 1140</u>
Total equivalent unit = <u>11,940</u>
