The Chart Company has a process costing system. All materials are added when the process is first begun. At the beginning of September, there were no units of product in process. During September 61,000 units were started; 6,100 of these were still in process at the end of September and were 3/5 finished. The equivalent units for the conversion costs in September were:

Question

Dempsey

Business

8 January, 00:45

The Chart Company has a process costing system. All materials are added when the process is first begun. At the beginning of September, there were no units of product in process. During September 61,000 units were started; 6,100 of these were still in process at the end of September and were 3/5 finished. The equivalent units for the conversion costs in September were:

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Porter Mendoza · Answer 1

58,560 units

Explanation:

The computation of the equivalent units of production for the conversion cost is shown below:

We know that,

Ending work in progress inventory = Units started - units completed

6,100 units = 61,000 units - units completed

So, units completed = 61,000 units - 6,100 units = 54,900 units

It is given in the question that 3 : 5 means 60% ending work in progress inventory units is completed,

So completed units = 6,100 * 60% = 3,660 units

So, the equivalent units of production equals to

= Units completed + completed units in ending inventory

= 54,900 units + 3,660 units

= 58,560 units