Question

Baden Company has gathered the following information. Units in beginning work in process 0 Units started into production 37,700 Units in ending work in process 8,700 Percent complete in ending work in process: Conversion costs 40 % Materials 100 % Costs incurred: Direct materials $81,055 Direct labor $64,400 Overhead $102,872 Compute equivalent units of production for materials and for conversion costs.

Answer 1

To compute the equivalent units of production for materials and conversion costs, consider the units started into production and the units in ending work in process.

Step-by-step explanation:

To compute the equivalent units of production for materials and conversion costs, we need to consider the units started into production and the units in ending work in process.

For materials, the equivalent units of production would be the sum of units started into production and the percentage of completion of the units in ending work in process multiplied by the number of units in ending work in process.

For conversion costs, the equivalent units of production would be the same as the equivalent units of production for materials.

Answer 2

The materials equivalent units is 37,700

Conversion costs equivalent units is 32,480

Step-by-step explanation:

The equivalent units of production for materials can be computed thus:

Description quantity % of completion Equivalent units

Completed units 29000 100 29000

(37700-8700)

Ending inventory 8700 100 8700

total equivalent units for materials 37700

The equivalent units of production for conversion costs can be computed thus:

Description quantity % of completion Equivalent units

Completed units 29000 100 29000

(37700-8700)

Ending inventory 8700 40 3480

total equivalent units for conversion costs 32480

I applied 100% percentage of completion to ending inventory when determining materials equivalent units and 40% percentage completion when determining equivalent units for conversion cots as it given in the question