Durante Company produces plastic cups in a one-department process.The following data is available for the past month:
$\begin{array} { l }
\text {Work-in-process inventory, beginning }&0 \
\text {Units started }& 60,000\
\text {Units completed and transferred }&48,000 \
\text {Work-in-process inventory, ending }&12,000 \
\end{array}$

The units in process at the end of the month are 100 percent complete with respect to materials and 50 percent complete with respect to conversion costs.What are the equivalent units for conversion costs for the month?

Question

Durante Company produces plastic cups in a one-department process.The following data is available for the past month:
$\begin{array} { l  }
 \text {Work-in-process inventory, beginning }&0 \
 \text {Units started }& 60,000\
 \text {Units completed and transferred }&48,000 \
 \text {Work-in-process inventory, ending }&12,000 \
\end{array}$

The units in process at the end of the month are 100 percent complete with respect to materials and 50 percent complete with respect to conversion costs.What are the equivalent units for conversion costs for the month?

Quizplus · Accepted Answer

The equivalent units for conversion costs are calculated as the sum of the units completed and transferred out (which are 100% complete for conversion costs) plus the units in ending work-in-process inventory multiplied by their percentage completion for conversion costs. Thus, $48,000 + (12,000 \times 0.5) = 48,000 + 6,000 = 54,000$.

Durante Company Produces Plastic Cups in a One-Department Process The Units in Process at the End of the Month