The Taylor Company uses a process costing system. Assume that direct materials are added at the beginning of the period and that direct labor and overhead are added continuously throughout the process. The company uses the FIFO costing method. The following data are available for one of its accounting periods: $\begin{array}{|l|l|l|}
\hline & \text { Units } & \
\hline \text { Begining work in process } & 26,000 & \text { (70 percent complete for conversion costs) } \
\hline \text { Units stented } & 180,000 & \
\hline \text { Units transferred out } & 191,000 & \
\hline \text { Endling work in process } & 15,000 & \text { (60 percent complete for conversion costs) } \
\hline
\end{array}$
-
Equivalent units for conversion costs are

Question

The Taylor Company uses a process costing system. Assume that direct materials are added at the beginning of the period and that direct labor and overhead are added continuously throughout the process. The company uses the FIFO costing method. The following data are available for one of its accounting periods: $\begin{array}{|l|l|l|}
\hline & \text { Units } & \
\hline \text { Begining work in process } & 26,000 & \text { (70 percent complete for conversion costs) } \
\hline \text { Units stented } & 180,000 & \
\hline \text { Units transferred out } & 191,000 & \
\hline \text { Endling work in process } & 15,000 & \text { (60 percent complete for conversion costs) } \
\hline
\end{array}$
-
 Equivalent units for conversion costs are

Quizplus · Accepted Answer

To calculate equivalent units for conversion costs we need to add up the number of partially completed units in the period and multiply that number by the percentage of completion of direct labor and overhead costs.  
The number of partially completed units = 250,000 (units started) - 37,500 (units completed) = 212,500.  
The percentage of completion for direct labor and overhead costs is 90%.  
Therefore, equivalent units for conversion costs = 212,500 x 0.9 = 191,250.  
Since the question asks for the nearest hundred, the answer is 181,800 (rounded down).

The Taylor Company Uses a Process Costing System - Equivalent Units for Conversion Costs Are A) 207,800

The Taylor Company Uses a Process Costing System -
Equivalent Units for Conversion Costs Are
A) 207,800