Question

Equivalent Units of Materials Cost The Rolling Department of Kraus Steel Company had 3,000 tons in beginning work in process inventory (60% complete) on October 1. During October, 50,800 tons were completed. The ending work in process inventory on October 31 was 2,500 tons (50% complete). What are the total equivalent units for direct materials for October if materials are added at the beginning of the process? units

Answer 1

Sol.(1) Equivalent Waits for direct Mauteriel Here, we shall note that direct materials are re added at the beginning of the process. Beginning work in process of 3.000 tons would have added direct Material when it started that is in forevious period so it will have zero equivalent Units. Ending Worle in process 2500 tons though 50% Complete entire 100% direct material is added when it startede

Equivalent Whit for Conversion Total Percentage of whole Qty completion Beginning Inventory in process 3ood tons 0% Started and completed during the period 47,800 tons 100% Transferred out of Yelling department 50,800 tond Inventory in process 2.500 ton 100% Totad Equivalent Units for direct Material 47,800 2500 50,300 Note : Started and Completed during the period > 50,800 ton's 47,800 tons 3ood tons

Equivalent Duit for Conversion 908 Sol.2) Conversion cost equivalent Units - units Toted whole Percentage of Quantity Completion beginning laventory in process 4540 tons 20% Started and Completed during the period 40.860 ton 100% Transferred out of rolling, department 45,400 tons Ending Inventory in 40% Total Equivalent Waits for Conversion 40,860 Process 3,178 tons 1271.2 443,034 Notei- Started and Completed during the periode 45,400 tous 4540 tons 40,860 tous

Sol.3) Calculation of cost per equivalent Unit - Direct Material Conversion Cost . Total Cost $ 510,000 $263,900 Equivalent Duit 2500 tons 4550 tons Cost per Equivalent Unit $204 Perton $58 perton Direct Material Cost per equivalent Duits $204 perton Conversion Costa per equivalent Unit = $58 perton Note : Direct Material Cost bes equivalent vuit => Total Direct Material Cast Equivalent wait for Direct Material $ 510,000 2500 tons $204 perton Conversion Costs Hoes equivalent Duits Total Conversion Costs Equivalent wait for conversion $ 263,900 4550 tons $58 loer ton