First Corporation adds all materials at the beginning of production and incurs conversion costs evenly throughout the manufacturing process. The company completed 70,000 units during the year and had 12,000 units in process at December 31, 20% complete with respect to conversion cost. Calculate the equivalent units of direct materials and conversion for the year.

Question

Quizplus · Accepted Answer

Equivalent units for materials are 82,000 (70,000 completed + 12,000 in process, as all materials are added at the start). For conversion, it's 72,400 (70,000 completed + 20% of 12,000 in process).

First Corporation Adds All Materials at the Beginning of Production