Question

The Molding Department of Boswell Company has the following production data: beginning work process 40,000 units (60% complete), started into production 730,000 units, completed and transferred out 690,000 units, and ending work in process 80,000 units (40% complete). Assuming conversion costs are incurred uniformly during the process, the equivalent units for conversion costs are:

Answer 1

Answer: 770,000 units

Explanation:

The Equivalent units for Conversion cost is calculated as:

= Total units completed and transferred out + Equivalent units of closing work in process

As the conversion costs were incurred uniformly during the process, the entire closing work in process would have already incurred conversion cost. Conversion cost closing equivalent units are therefore 80,000 units.

Equivalent units for Conversion cost = 690,000 + 80,000

= 770,000 units