The jones corporation uses a process system. during the current period, 2,500 units were started and 1,100 units were completed and transferred out. ending units were 60% complete for materials and 45% complete for conversion costs. direct materials costs added were $35,405 and conversion costs added were $32,870. there was no beginning wip inventory and conversion costs are added evenly throughout the process. at the end of the period, the total equivalent units for direct materials are

Question

Aarav Valentine

Business

16 January, 06:58

The jones corporation uses a process system. during the current period, 2,500 units were started and 1,100 units were completed and transferred out. ending units were 60% complete for materials and 45% complete for conversion costs. direct materials costs added were $35,405 and conversion costs added were $32,870. there was no beginning wip inventory and conversion costs are added evenly throughout the process. at the end of the period, the total equivalent units for direct materials are

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Scott Nichols · Answer 1

In order to find total equivalent units lets understand the term equivalent units. Equivalent units refer to units which have been processed fully, these units will also include the beginning and ending balance of Work in process inventory. In the given problem there is not beginning balance WIP, thus we shall first calculate total no of units that have been completely processed as below:

Units completely processed = Total Units put in-Ending Inventory

=2500-1100

=1400units

Thus Units completed will be 1400 units for both Materials and conversion cost.

We now find equivalent units completely processed for Materials in the ending invnetory.

Ending Inventory=1100 units, Since 60% of it is completed with respect to materials, the equivalent units = 660 units

Thus total equivent units for direct materials = 1400 units+660units

=2060units.