A department adds raw materials to a Process at the beginning of the process and incurs conversion costs uniformly throughout th

Question

3 years ago

6

A department adds raw materials to a Process at the beginning of the process and incurs conversion costs uniformly throughout th

e process. For the month of January, there were no units in the beginning work in process inventory; 90,000 units were started in production in January; and there were 20,000 units that were 40 percentage complete in V ending work in process inventory at the end of January What were the equivalent un of production for conversion costs for the month of January? a. 70,000 equivalent units b. 82,000 equivalent units. c. 78,000 equivalent units. d. 90,000 equivalent units.

Business

1 answer:

Natasha_Volkova [10] · Answer 1 · 2022-02-22T14:13:00+03:00

Answer: c. 78,000 equivalent units.

Explanation:

Equivalent units for conversion is calculated as:

= Units completed and transferred out + Equivalent ending work in process

Units completed and transferred out:

= Units started into production - Ending units

= 90,000 - 20,000

= 70,000 units

Equivalent ending work in process = 40% * 20,000 work in process units

= 8,000 units

Equivalent units for conversion = 70,000 + 8,000

= 78,000 units