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 23,000 gallons of the drink, and the 1600 gallons left in ending WIP were 50% of the way through the process. The number of equivalent units for conversion costs is

Question

Quizplus · Accepted Answer

Equivalent units for conversion costs are calculated based on the percentage of completion of the units in ending WIP. Since the 1600 gallons of ending WIP are 50% complete, the equivalent units for conversion costs would be 50% of the total number of units started, which is 23,000. Therefore, the equivalent units for conversion costs is 11,500 for the ending WIP.

For the units that have been completed, the equivalent units for conversion costs would be equal to the total number of units started, which is 23,000.

The total equivalent units for conversion costs would be the sum of the equivalent units for conversion costs in ending WIP and the equivalent units for conversion costs for completed units, which is 11,500 + 23,000 = 22,500.

However, in the question, it is stated that conversion costs are evenly distributed, which means that the total number of units started is equal to the total number of equivalent units for conversion costs. Therefore, the correct answer would be 23,000.

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