Question

The Chart Company has a process costing system. All materials are added when the process is first begun. At the beginning of September, there were no units of product in process. During September 65,000 units were started; 6,500 of these were still in process at the end of September and were 3/5 finished. The equivalent units for the conversion costs in September were____________________.

Answer 1

Answer:

62,400 units

Explanation:

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

= Started and completed units ×  completion percentage + closing inventory units × completion percentage

where,

Started and completed units is

= 65,000 units - 6,500 units

= 58,500 units

So the equivalent units is

= 58,500 units × 100 + 6,500 units × 60%

= 58,500 units + 3,900 units

= 62,400 units

The 3/5 finished means 60% is finished