Question

Equivalent Units of Conversion Costs

The Rolling Department of Oak Ridge Steel Company had 6,523 tons in beginning work in process inventory (10% complete) on July 1. During July, 59,300 tons were completed. The ending work in process inventory on July 31 was 4,744 tons (60% complete).

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

Answer 1

Solution:

Using Weighted Aveareg method:

	Units	% Conversion	EUP- Conversion
Units Completed and transferred out	59300	100%	59300
units of Ending work in process	4744	60%	2846
Equivalent units of production			62146

Using FIFO method:

	Units	% Conversion	EUP- Conversion
units in process, July 1	6523	90%	5871
Units started and completed during July (59300-6523)	52777	100%	52777
Toal units completed and transferred out			58648
Units in process, July 31	4744	60%	2846
Equivalent units of production			61494

Note: Since method is not provided. I have solved by both method. You may refer the method which you may need.