Question

Baden Company has gathered the following information. Units in beginning work in process 0 Units started into production 37,700 Units in ending work in process 8,700 Percent complete in ending work in process: Conversion costs 40 % Materials 100 % Costs incurred: Direct materials $81,055 Direct labor $64,400 Overhead $102,872 Compute equivalent units of production for materials and for conversion costs.

Answer 1

Answer:

The materials equivalent units is 37,700

Conversion costs equivalent units is 32,480

Explanation:

The equivalent units of production for materials can be computed thus:

Description                   quantity           % of completion    Equivalent units

Completed units            29000              100                          29000

(37700-8700)

Ending inventory            8700                100                          8700

total equivalent units for materials                                      37700

The equivalent units of production for conversion costs can be computed thus:

Description                   quantity           % of completion    Equivalent units

Completed units            29000              100                          29000

(37700-8700)

Ending inventory            8700                40                          3480

total equivalent units for conversion costs                       32480

I applied 100% percentage of completion to ending inventory when determining materials equivalent units and 40% percentage completion when determining equivalent units for conversion cots  as it given in the question