LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 gallons of partially processed product in production. During January, 32,000 gallons were transferred in from the Mixing Department and 29,000 gallons were completed and transferred out. At the end of the month, there were 5,000 gallons of partially processed product remaining in the Refining Department. See additional details below. Refining Department, ending balance at January 31, 2012
$$\begin{array} { | l | l | }
\hline \text { Percentage completion for materials cost: } & 90 \% \
\hline \text { Percentage completion for conversion cost: } & 75 \% \
\hline
\end{array}$$ For the Refining Department, what was the total number of equivalent units of production for conversion costs for the month of January?

Question

LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 gallons of partially processed product in production. During January, 32,000 gallons were transferred in from the Mixing Department and 29,000 gallons were completed and transferred out. At the end of the month, there were 5,000 gallons of partially processed product remaining in the Refining Department. See additional details below. Refining Department, ending balance at January 31, 2012
$$\begin{array} { | l | l | } 
\hline \text { Percentage completion for materials cost: } & 90 \% \
\hline \text { Percentage completion for conversion cost: } & 75 \% \
\hline
\end{array}$$ For the Refining Department, what was the total number of equivalent units of production for conversion costs for the month of January?

Quizplus · Accepted Answer

The equivalent units for conversion costs are calculated by adding the units completed and transferred out (29,000) to the equivalent units in ending inventory (5,000 gallons * 75% = 3,750). Therefore, the total equivalent units for conversion costs are 29,000 + 3,750 = 32,750 units.

LDR Manufacturing Produces a Pesticide Chemical and Uses Process Costing