Hannish Orchards,a juice manufacturer,uses a process that adds flavoring at the beginning of the process and vitamins and minerals 70% of the way through the process.Conversion costs are evenly distributed.Assume there are no beginning inventories.The company started making 10,000 gallons of the drink,and the 2,000 gallons left in ending WIP were 40% of the way through the process.
- The number of equivalent units for conversion costs is:

Question

Hannish Orchards,a juice manufacturer,uses a process that adds flavoring at the beginning of the process and vitamins and minerals 70% of the way through the process.Conversion costs are evenly distributed.Assume there are no beginning inventories.The company started making 10,000 gallons of the drink,and the 2,000 gallons left in ending WIP were 40% of the way through the process. 
-  The number of equivalent units for conversion costs is:

Quizplus · Accepted Answer

To determine the equivalent units for conversion costs, we need to consider the work done on both completed units and units still in progress (i.e. ending WIP).

The completed units are 10,000 gallons, so the equivalent units for conversion costs for these units is also 10,000 (since they are fully processed).

For the ending WIP, we know that it is 40% of the way through the process, so the equivalent units for conversion costs are:

2,000 gallons x 40% = 800 equivalent units

Thus, the total equivalent units for conversion costs are:

10,000 + 800 = 8,800

Therefore, the correct choice is D.

Hannish Orchards,a Juice Manufacturer,uses a Process That Adds Flavoring at the Beginning