Hair Shine Company produces Shine Bright shampoo and uses a process costing system. Conversion costs are added evenly throughout the production process. The following information is available for March for the Mixing Department: $\begin{array}{l}
\text { Units in process, March } 1 \text { (40\% complete) } & 200 \
\text { Units started in March } & 1,000 \
\text { Units in process, March } 31 \text { (80\% complete) } & 250\
\text { Conversion costs in Work in Process, March 1: }\
\text { Labor } & \$ 38,000 \
\text { Overhead } & 8,000\
\text { Labor costs during March ( } 5,100 \text { hours) } & 102,780\
\text { Overhead applied during March } & 49,020
\end{array}$ What is the amount of conversion costs included in units completed during March?

Question

Quizplus · Accepted Answer

To find the conversion costs included in units completed, calculate the total conversion costs for March and then allocate them to completed units. Total conversion costs = Beginning WIP conversion costs + Current period conversion costs = ($38,000 + $8,000) + ($102,780 + $49,020) = $197,800. Calculate equivalent units for conversion costs: Completed units = 950 (1,200 started - 250 in ending WIP). Equivalent units for ending WIP = 250 * 80% = 200. Total equivalent units = 950 + 200 = 1,150. Conversion cost per equivalent unit = $197,800 / 1,150 = $172. Conversion costs for completed units = 950 * $172 = $163,400.

Hair Shine Company Produces Shine Bright Shampoo and Uses a Process