Question

$125,000 Costs: Work in process, April 1 Direct materials: 100% complete Conversion costs: 20% complete Cost of work in process, April 1 Costs incurred during production in April Direct materials Conversion costs Costs incurred in April 87,500 $212,500 $1,000,000 456,250 $1,456,250 Units transferred out totaled 21.250. Ending work in process was 1.250 units that are 100% complete as to materials and 40% complete as to conversion costs. (a) Compute the equivalent units of production for (1) materials and (2) conversion costs for the month of April.

Answer 1

Answer:

The equivalent units of production:

Materials = 22,500

Conversion Costs = 21,750

Explanation:

Total equivalent units for a cost component = A + (B x C)

Where
A = units transferred out to the next department/finished goods
B = units in closing work in process
C = percentage of completion with respect to the relevant cost component

By applying above formula the equivalent units of production is calculated as under:

Materials = 21250 + (1250 x 100%) = 21250 + 1250 = 22500

Conversion Costs = 21250 + (1250 x 40%) = 21250 + 500 = 21750

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