Sunnyside Orchards, a juice manufacturer, uses a process that adds flavoring at the beginning of the process and vitamins and minerals 65% of the way through the process. Conversion costs are evenly distributed. Assume there are no beginning inventories. The company started making 18,000 gallons of the drink, and the 2300 gallons left in ending WIP were 20% of the way through the process. The number of equivalent units for vitamins and minerals is

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Quizplus · Accepted Answer

The equivalent units for vitamins and minerals are calculated based on the point in the process they are added and the completion status of the work in process (WIP). Since vitamins and minerals are added 65% of the way through the process, the 2300 gallons left in ending WIP at 20% completion would not have had vitamins and minerals added yet. Therefore, the equivalent units for vitamins and minerals are calculated for the completed units only, which is 18,000 gallons started minus the 2300 gallons not completed, equaling 15,700 gallons.

Sunnyside Orchards, a Juice Manufacturer, Uses a Process That Adds