Question

Jane Industries manufactures plastic toys. During October, Jane's Fabrication Department started work on 10,000 models. During the month, the company completed 11,000 models, and transferred them to the Distribution Department. The company ended the month with 1,500 models in ending inventory. There were 2,500 models in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is being followed. Beginning work in process was 25% complete as to conversion costs, while ending work in process was 50% complete as to conversion costs.

Required:
What were the equivalent units for conversion costs during October?

Answer 1

11,125 units

Step-by-step explanation:

Particulars Units

Beginning WIP (2500*0.75) 25% is completed 1,875

Units started and completed during the month 8500

[10,000 -1500 as ending Inventory]

Ending Inventory [1500*0.50] 750

Equivalent units 11,125

So, the equivalent units for conversion costs during October is 11,125 units