Macho Company produces calendars in a one-department process.The following information is available: $\begin{array}{lr}
\text { Direct materials added } & \$ 30,000 \
\text { Direct labor } & \$ 20,700 \
\text { Factory overhead } & \$ 10,350 \
& \
\text { Work-in-process inventory, beginning } & -0- \
\text { Units statted } & 15,000 \
\text { Units completed and transferred out } & 12,000 \
\text { Work-in-process inventory, ending } & 3,000
\end{array}$ The units still in process are 100% complete with respect to direct materials and 50% complete with respect to conversion costs.The equivalent units for conversion costs are _____.
A)3,000
B)15,000
C)12,000
D)13,500

Question

Quizplus · Accepted Answer

The equivalent units for conversion costs are calculated by adding the units completed and transferred out (which are 100% complete for conversion costs) to the equivalent units for the work in process based on their percentage completion for conversion costs. Here, 12,000 units were completed and transferred out, and the 3,000 units still in process are 50% complete with respect to conversion costs, so $12,000 + (3,000 \times 0.5) = 12,000 + 1,500 = 13,500$ equivalent units for conversion costs.

Macho Company Produces Calendars in a One-Department Process The Units Still in Process Are 100% Complete with Respect