Yummy Tummy Desserts has2600 quarts of ice cream in WIP Inventory, with all materials already added. The ice cream is 72% through the process. Assuming all conversion costs are added evenly throughout the process, what are the equivalent units for conversion costs?
A)0
B)2600
C)1872
D)728

Question

Quizplus · Accepted Answer

Equivalent units for conversion costs take into consideration the degree of completion of the units in the WIP inventory. Since the ice cream is already 72% complete, we only need to add conversion costs for the remaining 28% to determine the total equivalent units. Therefore, the equivalent units for conversion costs are 2600 x 0.28 = 728.

Yummy Tummy Desserts Has2600 Quarts of Ice Cream in WIP