Summers Company uses a weighted average process costing system and started 36,000 units this month.Jones had 15,000 units that were 25 percent complete as to conversion costs in beginning Work in Process Inventory and 6,000 units that were 35 percent complete as to conversion costs in ending Work in Process Inventory.What are equivalent units for conversion costs?

Question

Quizplus · Accepted Answer

Equivalent units for conversion costs are calculated by adding the units completed and transferred out to the equivalent units in ending inventory. Here, 36,000 units were started, and 15,000 units were in beginning inventory, so 51,000 units were accounted for. Subtract the 6,000 units in ending inventory (35% complete), which equals 2,100 equivalent units. Therefore, the equivalent units for conversion costs are 51,000 - 6,000 + 2,100 = 47,100.

Summers Company Uses a Weighted Average Process Costing System and Started