The following information is provided by Easy Street, Inc.: The units in ending WIP Inventory were 75% complete for materials and 43% complete for conversion costs.
At the end of the year, what are the equivalent units for conversion costs?
A)5805
B)8500
C)2150
D)10,650

Question

The following information is provided by Easy Street, Inc.:  The units in ending WIP Inventory were 75% complete for materials and 43% complete for conversion costs.
At the end of the year, what are the equivalent units for conversion costs?
A)5805 
B)8500 
C)2150 
D)10,650

Quizplus · Accepted Answer

The equivalent units for conversion costs are calculated as follows:

Units in Ending WIP Inventory × Percentage Complete for Conversion Costs = Equivalent Units for Conversion Costs 
= 11,000 × 0.43 = 4,730

Units Completed and Transferred Out × Percentage Complete for Conversion Costs = Equivalent Units for Conversion Costs 
= 63,000 × 1 = 63,000

Total Equivalent Units for Conversion Costs = Units in Ending WIP Inventory (Converted) + Units Completed and Transferred Out 
= 4,730 + 63,000 = 67,730

Therefore, the best choice is D, 10,650.

The Following Information Is Provided by Easy Street, Inc