Question

Department w had 2,400 units, one-third completed at the beginning of the period; 16,000 units were transferred to department x from department w during the period; and 1,800 units were one-half completed at the end of the period. assume the completion ratios apply to direct materials and conversion costs. what is the equivalent units of production used to compute unit conversion cost on the cost of production report for department w? assume the company uses fifo.

Answer 1

The equivalent units of production for calculating conversion costs in Department W using FIFO are 16,900 units. This consists of 16,000 units transferred out and 900 equivalent units for the 1,800 units at half completion stage.

Step-by-step explanation:

To calculate the equivalent units of production for unit conversion cost in Department W, using the FIFO method, we need to account only for the work done in the current period. Department W had 2,400 units at the beginning that were one-third completed, which means 800 units (2,400 units * 1/3) were already processed in the previous period. Therefore, these do not count for the current period. During the period, 16,000 units were transferred out. We also need to consider the 1,800 units at the end at one-half completion, which contributes 900 equivalent units (1,800 units * 1/2) for the current period.

To determine the number of equivalent units for conversion costs, we perform the following calculation:

1. Equivalent units for units transferred to Department X: 16,000 units (these are complete with respect to Department W's work).
2. Equivalent units for ending work-in-process: 1,800 units * 1/2 = 900 units.
3. Total equivalent units of production for conversion costs: 16,000 units + 900 units = 16,900 units.

Answer 2

The equivalent units of production used to compute unit conversion cost on the cost of production report for department w should be:

equivalent units of production = 16,000 units + (2/3) * 2,400 units

equivalent units of production = 17,600 units

The 1800 units are 1/2 completed but it doesn’t say what they're assigned to therefore we don’t use that in the calculation.

ANSWER: 17,600 units