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14 April, 03:26

Aron Company has a process costing system. All materials are introduced when conversion costs reach 50 percent. The following information is available for physical units during March

Work in process, March 1 (60% complete as to conversion costs) 150,000Units started in March 600,000Units transferred to Finishing Department in March 630,000Work in process, March 31 (40% complete as to conversion costs) 120,000Compute the equivalent units for materials costs and for conversion costs using the weighted-average method.

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  1. 14 April, 03:39
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    630,000 units and 678,000 units

    Explanation:

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

    For material cost

    = Units transferred * completion percentage + ending work in process units * completion percentage

    = 630,000 units * 100% + 120,000 units * 0%

    = 630,000 units + 0 units

    = 630,000 units

    For conversion cost

    = Units transferred * completion percentage + ending work in process units * completion percentage

    = 630,000 units * 100% + 120,000 units * 40%

    = 630,000 units + 48,000 units

    = 678,000 units
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