A department adds all raw materials at the very beginning of the process and incurs conversion costs evenly throughout the process. For the month of March, there were no units in the beginning work-in-process inventory; 5,000 units were started in March, and there were 1,500 units that were 60% complete in the ending work-in-process inventory at the end of March. What were the equivalent units of production for conversion costs for the month of March?

Question

Quizplus · Accepted Answer

The equivalent units for conversion costs are calculated by adding the units completed and transferred out to the equivalent units in ending work-in-process. Here, 3,500 units were completed (5,000 started - 1,500 in ending inventory), and the 1,500 units in ending inventory were 60% complete, contributing 900 equivalent units (1,500 * 60%). Thus, the total is 3,500 + 900 = 4,400 equivalent units.

A Department Adds All Raw Materials at the Very Beginning