Question

1.The Rolling Department of Kraus Steel Company had 2,700 tons in beginning work in process inventory (40% complete) on October 1. During October, 44,300 tons were completed. The ending work in process inventory on October 31 was 2,200 tons (60% complete).

What are the total equivalent units for direct materials for October if materials are added at the beginning of the process?
units

2.

The Rolling Department of Kraus Steel Company had 10,023 tons in beginning work in process inventory (10% complete) on October 1. During October, 77,100 tons were completed. The ending work in process inventory on October 31 was 3,855 tons (30% complete).

What are the total equivalent units for conversion costs? Round to the nearest whole unit.
units

Answer 1

1. Equivalent units for direct material

Here , we shall note that direct materials are added at the beginning of the process.

Beginning work in process of 2700 tons would have added direct material when it started that is in previous period.so it will have zero equivalent units.

Ending work in process 2,200 tons though 60% complete entire 100% direct material is added when it started.

	Total whole quantity	percent completion completed in current period	Equivalent units for conversion
Inventory in process, beginning	2,700 tons	0%	0
started and completed during the period**	41,600 tons	100%	41,600
Transferred out of rolling department	44,300 tons
Inventory in process, ending	2,200	100%	2,200
Total equivalent units for direct materials			43,800

**44300-2700=41,600 tons

2.conversion cost equivalent units

	Total whole quantity	percent completion completed in current period	Equivalent units for conversion
Inventory in process, beginning	10,023 tons	90%	9020.7
started and completed during the period**	67,077	100%	67,077
Transferred out of rolling department	77,100 tons
Inventory in process, ending	3,855	30%	1156.5
Total equivalent units for conversion			77,254