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Jane Industries manufactures plastic toys. During October, Jane's Fabrication Department started work on 10,000 models. During the month, the company completed 11,000 models, and transferred them to the Distribution Department. The company ended the month with 1,500 models in ending inventory. There were 2,500 models in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is being followed. Beginning work in process was 25% complete as to conversion costs, while ending work in process was 50% complete as to conversion costs.

Required:
What were the equivalent units for conversion costs during October?

Sagot :

Tundexi

Answer:

11,125 units

Explanation:

Particulars                                                                  Units

Beginning WIP (2500*0.75) 25% is completed       1,875

Units started and completed during the month      8500

[10,000 -1500 as ending Inventory]  

Ending Inventory [1500*0.50]                                    750

Equivalent units                                                         11,125

So, the equivalent units for conversion costs during October is 11,125 units

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