Question

The Assembly Department for Right pens has the following production data for the current month.

Beginning Work in Process Units Transferred Out Ending Work in Process
0 15,000 10,000
Materials are entered at the beginning of the process. The ending work in process units are 50% complete as to conversion costs.
Compute the equivalent units of production for (a) materials and (b) conversion costs.

Answer 1

The equivalent units of production for materials are 25,000 units since materials are added at the beginning of the processing. For conversion costs, the equivalent units are 20,000, considering that the ending work in process is 50% complete.

Step-by-step explanation:

Equivalent Units of Production Calculation

To compute the equivalent units of production for the Assembly Department of Right pens, we must consider both materials and conversion costs separately, as the question indicates materials are added at the beginning of the process and the ending work in process is 50% complete with respect to conversion costs.

Materials Equivalent Units

For materials, since they are added at the beginning of the process, the equivalent units will be the total units transferred out plus the units in ending work in process, which means:

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• Equivalent units for materials = Units transferred out + Ending work in process
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• Equivalent units for materials = 15,000 units + 10,000 units
• 
  
• Equivalent units for materials = 25,000 units

Conversion Costs Equivalent Units

For conversion costs, the equivalent units will be the units transferred out plus the percentage of completion for the ending work in process, calculated as follows:

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• Equivalent units for conversion costs = Units transferred out + (Ending work in process × Percent complete)
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• Equivalent units for conversion costs = 15,000 units + (10,000 units × 50%)
• 
  
• Equivalent units for conversion costs = 15,000 units + 5,000 units
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• Equivalent units for conversion costs = 20,000 units