The Converting Department of Hopkinsville Company had 1,200 units in work in process at the beginning of the period, which were 75% complete. During the period, 25,200 units were completed and transferred to the Packing Department. There were 1,360 units in process at the end of the period, which were 25% complete. Direct materials are placed into the process at the beginning of production. Determine the number of equivalent units of production with respect to direct materials and conversion costs. If an amount is zero, enter in "0".

Question

Shaniya Grant

Business

14 October, 01:51

The Converting Department of Hopkinsville Company had 1,200 units in work in process at the beginning of the period, which were 75% complete. During the period, 25,200 units were completed and transferred to the Packing Department. There were 1,360 units in process at the end of the period, which were 25% complete. Direct materials are placed into the process at the beginning of production. Determine the number of equivalent units of production with respect to direct materials and conversion costs. If an amount is zero, enter in "0".

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Yaritza Underwood · Answer 1

Equivalent Units

Material cost = 26,560

Conversion Cost = 25,540

Explanation:

We would assume the company uses weighted average method of valuation.

Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required is done in the period under consideration. So there is no separation of the completed units into opening inventory and fully worked.

Equivalent units = Degree of completion (%) * Number of units

Material cost

Item Unit Equivalent unit

Completed 25,200 100% * 25200 = 25,200

Closing WIP 1,360 100% * 1,360 1360

Total equivalent units 26,560

Conversion Cost

Item Unit Equivalent unit

Completed 25,200 100% * 25200 = 25,200

Closing WIP 1,360 25% * 1,360 340

Total equivalent units 25,540