Arona Corporation manufactures canoes in two departments, Fabrication and Waterproofing. In the Fabrication Department, fiberglass panels are attached to a canoe- shaped aluminum frame. The canoes are then transferred to the Waterproofing department to be coated with sealant. Arona uses a weighted-average process cost system to collect costs in both departments.All materials in the Fabrication Department are added at the beginning of the production process. On July 1, the Fabrication Department had 30 canoes in process that were 20% complete with respect to conversion cost. On July 31, Fabrication had 20 canoes in process that were 40% complete with respect to conversion cost. During July, the Fabrication Department completed 86 canoes and transferred them to the Waterproofing Department.What are the Fabrication Department's equivalent units of production related to materials for July?

Question

Quizplus · Accepted Answer

Since all materials in the Fabrication Department are added at the beginning of the production process, the equivalent units of production for materials would be equal to the total number of canoes that were either completed or still in process at the end of the period. This includes the 86 canoes completed and transferred out plus the 20 canoes still in process at the end of July, totaling 106 equivalent units.

Arona Corporation Manufactures Canoes in Two Departments, Fabrication and Waterproofing