Question

The Assembly Department for Right pens has the following production data for the current month.

Beginning Work in Process		Units Transferred Out		Ending Work in Process
0		22,000		20,000

Materials are entered at the beginning of the process. The ending work in process units are 63% complete as to conversion costs.

Compute the equivalent units of production for (a) materials and (b) conversion costs.

		Materials		Conversion costs
The equivalent units of production

Answer 1

Answer:-

Equivalent Units of Production :

a) Materials

Units Transferred Out [22000*100% complete]	22,000
Ending WIP [20000*100% complete]	20,000
Total Equivalent Units of Production	42,000

b) Conversion Costs

Units Transferred Out [22000*100% complete]	22,000
Ending WIP [20000*63% complete]	12,600
Total Equivalent Units of Production	34,600

Note:-

• It is given that Materials are entered at the beginning of the process hence the units lying in ending Work in Process will be 100% complete with respect to Materials.
• The units lying in ending Work in Process are 63% complete with respect to Conversion Costs, hence 20000*63/100 = 12,600 units.