Chapter 18: Q.18.2TI (page 967)

Question: The Cutting Department has 6,500 units in process at the end of September that are 100% complete for direct materials and 85% complete for conversion costs. Calculate the equivalent units of production for direct materials and conversion costs.

Expert verified

Answer:

1. The equivalent unit of production for direct material is 6,500 unit.

2. The equivalent unit of production for conversion cost id 5,525 units.

Step by step solution

$Equalentunitofproduction=Numberofunits×CompletionPercentage = 6, 500 \times 100 % = 6, 500$

$Equalentunitofproduction=Numberofunits×CompletionPercentage = 6, 500 \times 85 % = 5, 525$

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Unit in process at the beginning of august	900
Units started in august	2,000
Units completed and transferred	2,100
Units in process at the end of august	800

UNITS
Beginning work-in-process inventory	0 sheets
Started in production	3,800 sheets
Completed and transferred out to compression in January	2,900 sheets
Ending work-in-process inventory (30% of the way through the preparation process)	900 sheets
COSTS
Beginning work-in-process inventory	$0
Costs added during January
Wood	2,888
Adhesive	1,914
Direct labor	987
Manufacturing overhead allocated	2,500
Total costs	8,289