Question

Grimm Manufacturing is trying to determine the equivalent units for conversion costs with 15,000 units of ending work in process at 40% completion when there is a total 45,000 physical units. There are no beginning units in the department. Conversion costs occur evenly throughout the entire production period. What are the equivalent units for conversion costs for the current period

Answer 1

Answer: 36000 units

Explanation:

Ending work in process = 15,000 units

Completion rate = 40%

Total physical units = 45,000

The units completed will be:

= Total Units - Ending working in process

= 45,000 - 15,000

= 30,000

Since only 40% of the ending work in process inventory units has been completed, the completed units will then be:

= 15,000 × 40%

= 15000 × 0.4

= 6,000 units.

Then, the equivalent units for conversion costs for the current period will be:

= 30,000 + 6,000

= 36,000 units.