Question

A department adds all raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of January, there were no units in the beginning work in process inventory; 91300 units were started into production in January; and there were 20900 units that were 40% complete in the ending work in process inventory at the end of January. What were the equivalent units of production for conversion costs for the month of January?

Answer 1

Answer:

The equivalent units of production for conversion costs for the month of January is 78,760 units

Explanation:

The computation of the equivalent units of production for the conversion cost is shown below:

We know that,

Ending work in progress inventory = Units started - units completed

20,900 units = 91,300 units - units completed

So, units completed = 91,300 units -20,900 units = 70,400 units

It is given in the question that 40% ending work in progress inventory units is completed,

So completed units = 20,900 × 40% = 8,360 units

And,the equivalent units of production equals to

= Units completed + completed units in ending inventory

= 70,400 units + 8,360 units

= 78,760 units