Final answer:
The equivalent units of production for conversion costs are calculated by adding the total completed units to the equivalent units of ending work in process. With 5000 units at 80% completion, the ending work in process adds 4000 equivalent units. Therefore, the correct answer is 44000 equivalent units for conversion costs.
Step-by-step explanation:
To determine the equivalent units of production for conversion costs, we need to calculate the number of completed units plus the equivalent units in the ending work in process inventory based on their stage of completion. Since there are no beginning units and materials are added at the beginning, the calculation for materials is straightforward. However, conversion costs occur evenly, so we must calculate the equivalent units for the ending work in process which are at 80% completion.
The formula for equivalent units of production for conversion costs is:
- Compute the total units completed and transferred out.
- Add the equivalent units of ending work in process.
Since all materials are added at the beginning of the process, the equivalent units for materials is equal to the total units of production, which is given as 45000 units. For conversion costs, we have to account for the 5000 ending work in process units which are 80% complete.
Thus, equivalent units of ending work in process for conversion costs = 5000 units * 80% = 4000 units.
Since there are no beginning units, the total units completed and transferred out will be the remaining 40000 units (45000 total - 5000 ending work in process).
Therefore, the equivalent units for conversion costs = total units completed and transferred out (40000 units) + equivalent units of ending work in process for conversion costs (4000 units).
Equivalent units of production for conversion costs = 40000 + 4000 = 44000.
The correct answer is (a) 44000.