The May Corporation uses a process system. During the current period, 2700 units were started and 1600 units were completed and transferred out. Ending units were 60% complete for materials and 45% complete for conversion costs. Direct materials costs added were $32,100 and conversion costs added were $35,800. There was no beginning WIP Inventory and conversion costs are added evenly throughout the process. At the end of the period, what are the total equivalent units for conversion costs?
A)2260
B)1100
C)1600
D)2095

Question

Quizplus · Accepted Answer

Equivalent units for conversion costs = Units completed and transferred out + (Ending WIP units × Percentage completion)
Units completed and transferred out = 1600
Ending WIP units = 2700 - 1600 = 1100 units
Equivalent units for conversion costs = 1600 + (1100 × 45%) = 2095 units. Therefore, the answer is (D).

The May Corporation Uses a Process System