Answer the following questions using the information below:
The Daltry Tractor Company manufactures small garden tractors on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each tractor must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Daltry Tractor uses weighted-average costing.
Data for the Assembly Department for April 2012 are:
Costs for April 2012:

-What are the equivalent units for direct materials and conversion costs, respectively, for April?
A)1,350 units; 1,350 units
B)1,600 units; 1,600 units
C)1,600 units; 1,475 units
D)250 units; 125 units

Question

Answer the following questions using the information below:
The Daltry Tractor Company manufactures small garden tractors on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each tractor must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Daltry Tractor uses weighted-average costing.
Data for the Assembly Department for April 2012 are:
   Costs for April 2012:
 
-What are the equivalent units for direct materials and conversion costs, respectively, for April?
A)1,350 units; 1,350 units 
B)1,600 units; 1,600 units 
C)1,600 units; 1,475 units 
D)250 units; 125 units

Quizplus · Accepted Answer

The question provides no specific data on the number of tractors produced, so we must calculate the equivalent units. For direct materials, all the tractors have direct materials added at the beginning of the production process, so the equivalent units for direct materials are the same as the number of tractors produced, which is not given. For conversion costs, the equivalent units are calculated by taking the units that are fully completed in April (1,500) and the units that are partially completed (100% complete for materials and 20% complete for conversion costs) at the end of the month (100), and adding them together (1,600). Therefore, the answer is C, 1,600 units for direct materials and 1,475 units for conversion costs.

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