Question

The Steamboat Company began the month with 2,000 units in work in process which were 25% complete with respect to conversion costs. During the month, 10,000 units were started into production and the ending work in process consisted of 1,000 units which were 40% complete with respect to conversion costs. What was the number of equivalent units of production for conversion costs

Answer 1

The number of equivalent units of production for conversion costs was 6,000 units

Step-by-step explanation:

The 2,000 units at the beginning of the period is completed during the period and 10,000 units are started in the period.

Equivalent units of production = Completed Units + Portion of WIP completion at the end of the period )

Equivalent units of production = Completed Units + ( Numbers of units started in the period x Percentage of completed at the end of the period )

Where

Completed units = 2,000 units

Numbers of units started in the period = 10,000 units

Percentage of completed at the end of the period = 40%

Placing values in the formula

Equivalent units of production = 2,000 units + ( 10,000 units x 40% ) = 2,000 units + 4,000 units = 6,000 units