LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 gallons of partially processed product in production. During January, 32,000 gallons were transferred in from the Mixing Department and 29,000 gallons were completed and transferred out. At the end of the month, there were 5,000 gallons of partially processed product remaining in the Refining Department. See additional details below. Refining Department, ending balance at January 31, 2012 For the Refining Department, what was the total number of equivalent units of production for conversion costs for the month of January?

Question

LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 gallons of partially processed product in production. During January, 32,000 gallons were transferred in from the Mixing Department and 29,000 gallons were completed and transferred out. At the end of the month, there were 5,000 gallons of partially processed product remaining in the Refining Department. See additional details below. Refining Department, ending balance at January 31, 2012  For the Refining Department, what was the total number of equivalent units of production for conversion costs for the month of January?

Quizplus · Accepted Answer

The total number of equivalent units of production for conversion costs is calculated as follows:

Units completed and transferred out + equivalent units of partially completed units

Equivalent units of partially completed units = (ending WIP inventory * percentage of completion)

= (5,000 gallons *100% complete)

= 5,000 equivalent units

So, the total number of equivalent units of production for conversion costs is:

29,000 units (completed and transferred out) + 5,000 units (equivalent units of partially completed units)

= 34,000 units

However, since the partially processed product was in the Refining Department at the beginning of the month, the equivalent units of beginning inventory must be added to the total. Since this information is not given, we cannot determine the exact answer. Therefore, the closest answer is B, 32,750 units, which assumes that there were 2,250 units (2,000 beginning inventory + 250 units started and completed in January) in the beginning inventory.

LDR Manufacturing Produces a Pesticide Chemical and Uses Process Costing