Question

Equivalent Units of Conversion Costs The Rolling Department of Kraus Steel Company had 8,684 tons in beginning work in process inventory (50% complete) on October 1. During October, 66,800 tons were completed. The ending work in process inventory on October 31 was 6,012 tons (80% complete). What are the total equivalent units for conversion costs? Round to the nearest whole unit.

Answer 1

Answer using weighted average method = 71,610

Answer using FIFO method= 67,268

Working

Statement of Equivalent Units(Weighted average)
	Units			Complete %	Equivalent units
Transferred out	66,800			100%	66,800
Ending WIP	6,012			80%	4,810
Total	72,812			Total	71,610

.

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
Beginning WIP	8,684		50%		50%
Units introduced	64,128
Total units to be accounted for	72,812
Completed and Transferred unit	66,800		0%		100%
Ending WIP	6,012		0%		80%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units
Units Transferred:		% completed this period	Equivalent Units
From WIP	8,684	50%	4,342
From units started/Introduced	58,116	100%	58,116
Total	66,800		62,458
	Total Units	Material
Ending WIP		% completed this period	Equivalent Units
Total	6,012	80%	4,810
Total EUP	72,812		67,268