Jane Industries manufactures plastic toys. During October, Jane's Fabrication Department started work on 10,000 models. During the month, the company completed 11,300 models, and transferred them to the Distribution Department. The company ended the month with 2000 models in ending inventory. There were 3300 models in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is being followed. Beginning work in process was 30% complete as to conversion costs, while ending work in process was 55% complete as to conversion costs.

What were the equivalent units for conversion costs during October?

Question

Jane Industries manufactures plastic toys. During October, Jane's Fabrication Department started work on 10,000 models. During the month, the company completed 11,300 models, and transferred them to the Distribution Department. The company ended the month with 2000 models in ending inventory. There were 3300 models in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is being followed. Beginning work in process was 30% complete as to conversion costs, while ending work in process was 55% complete as to conversion costs.

What were the equivalent units for conversion costs during October?

Quizplus · Accepted Answer

Number of equivalent units in beginning inventory = 3300 x 0.7 = 2310 units
Units started and completed during October = 11,300 - 3300 = 8000 units
Number of equivalent units in ending inventory = 2000 x 55% = 1100 units
Total equivalent units = 2310 + 8000 + 1100 = 11,410 units

Jane Industries Manufactures Plastic Toys