During January, the Farnell Furniture Company produced 30,000 high-quality furniture sets: 7,500 from the January 1 work-in-process inventory and 22,500 from units started during the month. The January 30 work-in-process inventory consisted of 7,000 units 50% complete as to direct materials and 40% finished as to conversion costs. The January 1 inventory of work-in-process was 50% finished as to direct materials and conversion costs. The number of conversion cost equivalent units processed in January was:

Question

Quizplus · Accepted Answer

To calculate the conversion cost equivalent units processed in January, we need to first calculate the total equivalent units of production for direct materials and conversion costs separately.

For direct materials:
Total equivalent units = units started during the month + work-in-process inventory ending - work-in-process inventory beginning
Total equivalent units = 22,500 + 7,000(50%) - 7,500(50%)
Total equivalent units = 22,500 + 3,500 - 3,750
Total equivalent units = 22,250

For conversion costs:
Total equivalent units = units started during the month + work-in-process inventory ending 
Total equivalent units = 22,500 + 7,000(40%)
Total equivalent units = 22,500 + 2,800
Total equivalent units = 25,300

Therefore, the number of conversion cost equivalent units processed in January was 29,050 (25,300 equivalent units processed + 3,750 work-in-process inventory beginning). The correct answer is B.

During January, the Farnell Furniture Company Produced 30,000 High-Quality Furniture