Answer:
Fresh Foods
Equivalent Units for October:
a) Direct Materials: Units % of completion Equivalent Units
Completed & transferred out 25,000 100% 25,000
Ending work in process 25,000 100% 25,000
Total equivalent unit for direct materials = 50,000
b) Conversion costs: Units % of completion Equivalent Units
Completed & transferred out 25,000 100% 25,000
Ending work in process 25,000 35% 8,750
Total equivalent unit for conversion costs = 33,750
Explanation:
Equivalent unit of production is an expression of the amount of work done on units of output to show the degree of completion in an accounting period with regard to work in process. When the degree of completion (usually a percentage) is applied to the physical units in process, then the resulting figure is the equivalent units completed.
The calculation of equivalent units helps in the allocation of costs to units in the process of production. Usually, additional conversion costs will be incurred in subsequent periods on the partially completed units to add to the already incurred costs in the current period unlike with fully completed units.
Equivalent units are always 100% complete as to direct materials but less for other manufacturing processes.
