Question

Department A had no work in process at the beginning of the period, 16,000 units were started during the period, 2,000 units were 40% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period (assuming the company uses FIFO): Assuming that all direct materials are placed in process at the beginning of production, what are the conversion cost equivalent units?

Answer 1

Conversion Cost Equivalent Units = 14,800

Step-by-step explanation:

Beginning WIP = 0

Started 16,000

Ending 2,000 at 40%

Equivalent cost for conversion

`Started\: Units - Ending \: units * (1-completion)`

`16,000 - 2,000 * (1-0.40) = 16,000 - 2,000 * 0.6 = \\16,000 - 1,200 = 14,800`

There was none beginning inventory and the direct materials information is not relevant to calculate the conversion cost.