Wilson Carver Knives uses process costing. In its Cutting Department, all the materials are added at the beginning of the process and conversion costs are added evenly during the processing. During the first month of operations, the Cutting Department transferred 78,000 units to the Packing Department. The Cutting Department's ending Work in Process inventory consisted of 3,800 units that were 40% complete. What are the equivalent units for materials and for conversion costs in the Cutting Department, respectively?

Question

Quizplus · Accepted Answer

- For materials, all the units transferred out (78,000) plus the units in ending WIP inventory (3,800 x 40% = 1,520) equal 79,520 equivalent units.
- For conversion costs, the units transferred out (78,000) plus the units in ending WIP inventory (3,800 x 40% = 1,520) also equal 79,520 equivalent units.

Wilson Carver Knives Uses Process Costing