Ending Work in Process inventory in the Assembly Department consists of 700 units that are 50% complete with respect to conversion costs. The beginning inventory consisted of 2,000 units. During the month, 6,000 units were started. How many equivalent units will be used in the cost per equivalent unit calculation for conversion costs?

Question

Quizplus · Accepted Answer

The equivalent units for conversion costs are calculated as follows: Units completed and transferred out (Beginning inventory + Units started - Ending inventory) + Equivalent units in ending inventory (Ending inventory units * % completion). Here, 2,000 + 6,000 - 700 = 7,300 units completed and transferred out. The ending inventory equivalent units are 700 * 50% = 350. Therefore, 7,300 + 350 = 7,650 equivalent units.

Ending Work in Process Inventory in the Assembly Department Consists