Question

Garrison Company adds direct materials at the beginning of the process and adds conversion costs throughout the process. The following data represents data in the Shaping Department ​WIP, April 1 7 comma 000 units Transferredminusin costs in​ WIP, April 1 ​$79,940 Direct materials​ (100%) in​ WIP, April 1 ​$24,420 Conversion costs ​(55​%) in​ WIP, April 1 ​$23,400 Units transferredminusin 49 comma 000 Transferredminusin costs during April ​$550,900 Units completed 46 comma 000 April direct materials cost ​$155,500 April conversion costs ​$239,250 ​WIP, April 30 10 comma 000 units ​(100% for materials and 40​% for conversion​ costs) What are the equivalent units for conversion​ costs?

Answer 1

Equivalent Units for conversion = 50,000 units

Cost per equivalent unit for conversion = $5.253

Step-by-step explanation:

​WIP, April 1 = 7,000 units

Transferred-costs in​ WIP, April 1 = ​$79,940

Direct materials​ (100%) in​ WIP, April 1 = ​$24,420

Conversion costs ​(55​%) in​ WIP, April 1 = ​$23,400

Units transferred = 49,000

Transferred costs during April = ​$550,900

Units completed = 46,000

April direct materials cost =​$155,500

April conversion costs ​ =$239,250

WIP, April 30 =10,000 units

100% for materials and 40​% for conversion​ costs

Required = Equivalent Units for conversion cost?

Solution

Equivalent Units for conversion = 100% of units completed + 40% of units in work in process

Equivalent Units for conversion = (46000 x 100%) + ( 10,000 x 40%)

Equivalent Units for conversion = 46,000 + 4000

Equivalent Units for conversion = 50,000 units

Cost per equivalent unit for conversion = Total conversion cost/Equivalent unts for conversion

Cost per equivalent unit for conversion = (23,400+239,250) /50,000units

Cost per equivalent unit for conversion = $5.253