Question

The Molding Department of Kent Company has the following production data: beginning work in process 40,000 units (60% complete), started into production 680,000 units, and ending work in process 70,000 units (40% complete). Assuming conversion costs are incurred uniformly during the process, the equivalent units for conversion costs are Select one: a. 678,000. b. not able to be determined from the provided information. c. 732,000. d. 708,000. e. 718,000.

Answer 1

e. 718,000.

Step-by-step explanation:

The computation of the equivalent unit for conversion cost is shown below

= Completed & transferred units × completion percentage + ending work in process inventory units × completion percentage

= 690,000 units × 100% + 70,000 units × 40%

= 690,000 units + 28,000 units

= 718,000 units

We simply considered the completed & transferred units and the ending work in process inventory units