Question

DeJure Scents manufactures an aftershave and uses process costing. All materials are added at the beginning of the process, and conversion costs are incurred uniformly over time. In May, DeJure started 15,000 gallons. There was no beginning inventory. May's ending inventory of work-in-process was 2,000 gallons, which were 50 percent complete with respect to conversion costs. In May, conversion costs were $28 , 000 and materials costs were $45 , 000 . Required: Calculate the equivalent units of conversion and materials.

Answer 1

The equivalent units for materials are 15,000 gallons, as they are all added at the beginning, and the equivalent units for conversion are 14,000 gallons, calculated by adding the fully processed units to half the units in ending work-in-process inventory.

Step-by-step explanation:

To calculate the equivalent units of conversion and materials for DeJure Scents in May, we can follow this approach:

• Materials are added at the beginning, so the equivalent units for materials will be the total started as all will be fully incorporated: 15,000 gallons.
• For conversion costs, the equivalent units will be the sum of the completed units plus the equivalent units of the ending work-in-process inventory. Since there were 2,000 gallons at 50 percent completion, we'd calculate the equivalent conversion units as (15,000 gallons - 2,000 gallons) + (2,000 gallons * 50%) = 13,000 + 1,000 = 14,000 equivalent units of conversion costs.

The equivalent units of materials are 15,000 gallons and the equivalent units of conversion are 14,000 gallons.