Question

3. How would your answer in part 2 change if the percentage of completion in ending inventory were as follows: materials 30%, conversion 40%

Answer 1

Answer and Explanation:

The computation is shown below:

Particulars    direct   %                Equivalent Conversion %          Equivalent

                   material  completion units                              Completion   Units

Beginning

WIP            1,020         100%         1,020      1,020         100%         1,020

Units

started       3,700       100%          3,700       3,700       100%          3,700

(7,200 - 3,500)

Ending

WIP           3,500        30%          1,050       3,500         40%           1,400

Equivalent

units                                             5,770                                            6,120