Question

Equivalent Units of Materials Cost

The Rolling Department of Kraus Steel Company had 3,700 tons in beginning work in process inventory (90% complete) on October 1. During October, 60,900 tons were completed. The ending work in process inventory on October 31 was 3,000 tons (70% complete).

What are the total equivalent units for direct materials for October if materials are added at the beginning of the process?
units

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Are you determining the equivalent units of materials added or of conversion of materials? When would materials typically be added in the process? When would conversion of these materials take place? Recall the definition of work in process.

Answer 1

	Total whole quantity	percent completion completed in current period	Equivalent units
Inventory in process, beginning	3,700 tons	0%	-
started and completed during the period	57,200 tons	100%	57,200.00
Transferred out of rolling department	60,900 tons
Inventory in process, ending	3,000 tons	100%	3,000.00
Total equivalent units for direct materials			60,200.00