Pilot Protectors manufactures pocket knives in three processes and uses process costing.All materials are added at the start of the Forming Department process.The following information is available for March production for the Forming Department: $\begin{array}{lr}
\text { Beginning Work in Process (20\% complete) } & 2,000 \
\text { Plus: Units started } & 34,000\\text { Units to account for } & 36,000 \
\text { Less: Ending Work in Process ( } 70 \% \text { complete) } & 4,000\\text { Units completed }&32,000
\end{array}$
$\text { The following costs are available for March : }$

$\begin{array}{lrrrr}&\text { Material }&\text { Conversion Cost }&\text { Total Cost }\
\text { Beginning Work in Process }& \$ 11,800 & \$ 22,500 & \$ 34,300 \
\text { Current cost } & 65,600 & 64,500 & 130,100\
\text { Total cost }&\$77,400&\$87,000&\$164,400
\end{array}$ What are the equivalent units for conversion costs in the Forming Department during March?

Question

Pilot Protectors manufactures pocket knives in three processes and uses process costing.All materials are added at the start of the Forming Department process.The following information is available for March production for the Forming Department: $\begin{array}{lr}
\text { Beginning Work in Process (20\% complete) } & 2,000 \
\text { Plus: Units started } & 34,000\\text { Units to account for } & 36,000 \
\text { Less: Ending Work in Process ( } 70 \% \text { complete) } & 4,000\\text { Units completed }&32,000
\end{array}$
$\text { The following costs are available for March : }$

$\begin{array}{lrrrr}&\text { Material }&\text { Conversion Cost }&\text { Total Cost }\
\text { Beginning Work in Process }& \$ 11,800 & \$ 22,500 & \$ 34,300 \
\text { Current cost } & 65,600 & 64,500 & 130,100\
\text { Total cost }&\$77,400&\$87,000&\$164,400
\end{array}$ What are the equivalent units for conversion costs in the Forming Department during March?

Quizplus · Accepted Answer

The equivalent units for conversion costs are calculated by taking into account the units completed and the percentage completion of the ending work in process. For the units completed (32,000), they are fully processed, so they count as 32,000 equivalent units. The ending work in process (4,000 units) is 70% complete for conversion costs, so it contributes 4,000 units * 70% = 2,800 equivalent units. Adding these together gives 32,000 + 2,800 = 34,800 equivalent units for conversion costs.

Pilot Protectors Manufactures Pocket Knives in Three Processes and Uses