Borwan Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 8,000 units in its beginning work in process inventory that were 70% complete with respect to conversion costs. An additional 69,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 5,000 units in the ending work in process inventory of the Assembly Department that were 20% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month

Question

Lilly Delacruz

Business

4 February, 16:24

Borwan Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 8,000 units in its beginning work in process inventory that were 70% complete with respect to conversion costs. An additional 69,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 5,000 units in the ending work in process inventory of the Assembly Department that were 20% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month

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Answers (1)

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Hazel Nunez · Answer 1

73,000 units

Explanation:

The computation of equivalent units for conversion costs is shown below:-

Equivalent units = Units transferred : Finished goods + (Units in closing Work in progress * Percentage of completion)

= (8,000 + 69,000 - 5,000) + (5,000 * 20%)

= 72,000 + 1,000

= 73,000 units

Therefore for computing the Equivalent units we simply applied the above formula.