Question

Redrock, Inc., manufactures car batteries and follows the weighted average costing method. Following data are provided for the month of December:

Units completed and transferred out50,000 unitsUnits in ending work in process (Direct materials 100%complete Conversion costs 50% complete)20,000 units
Determine the equivalent units of output for the month of December with respect to conversion costs.

Answer 1

Equivalent units of output for conversion costs in the month of December are calculated by adding the fully completed units (50,000) to 50% of the units in ending work in process (10,000), resulting in a total of 60,000 equivalent units for conversion costs.

Step-by-step explanation:

To determine the equivalent units of output for conversion costs, we must take into account the degree of completion of the units in the ending work in process. As provided, there are 50,000 units completed and transferred out, which are 100% complete with respect to conversion costs, and there are 20,000 units in the ending work in process which are 50% complete with respect to conversion costs.

Therefore, the equivalent units for conversion costs are calculated as follows:

• Equivalent units for completed and transferred out = 50,000 units
• Equivalent units for ending work in process = 20,000 units * 50% = 10,000 units
• Total equivalent units for conversion costs = 50,000 units + 10,000 units = 60,000 units