Question

Goode Company has the following production data for selected months.

						Ending Work in Process
Month		Beginning Work in Process		Units Transferred Out		Units		% Complete as to Conversion Cost
January		0		40,400		13,900		41	%
March		0		44,300		8,600		75
July		0		50,600		22,000		22

Compute equivalent units of production for materials and conversion costs, assuming materials are entered at the beginning of the process.

		Materials		Conversion Costs
January
March
July

Answer 1

Month	Materials	Conversion Costs
January	54300	46099
March	52900	50750
July	72600	55440

Explanation-

As direct materials are added at the beginning of process the units in ending work in process will be 100% complete with respect to direct material.

Equivalent unit = Unit transferred out + (Ending Work in Process x Percent completion)

Calculation of Equivalent units

	Materials	Conversion costs
January	40400+(13900 x 100%) =54300	40400+(13900 x 41%) =46099
March	44300+(8600 x 100%)=52900	44300+(8600 x 75%) =50750
July	50600+ (22000 x 100%) =72600	50600+ (22000 x 22%) =55440