Question

Equivalent Units of Conversion Costs

The Bottling Department of Rocky Springs Beverage Company had 4,039 ounces in beginning work in process inventory (80% complete). During the period, 57,700 ounces were completed. The ending work in process inventory was 2,885 ounces (30% complete).

What are the total equivalent units for conversion costs? Note: Round to the nearest whole unit.

units

Answer 1

Equivalent units using weighted average method= 58,566

Equivalent units using FIFO method= 55,334

Please use the answer applicable. You did not mentioned the method to be used so i have solved in both methods.

Working

Statement of Equivalent Units(Weighted average)
						Conversion cost
	Units					Complete %	Equivalent units
Transferred out	57,700					100%	57,700
Ending WIP	2,885					30%	866
Total	60,585					Total	58,566

.

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
			Conversion cost		Conversion cost
Beginning WIP	4,039		80%		20%
Units introduced	56,546
Total units to be accounted for	60,585
Completed and Transferred unit	57,700		0%		100%
Ending WIP	2,885		0%		30%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units			Conversion cost
Units Transferred:				% completed this period	Equivalent Units
From WIP	4,039			20%	808
From units started/Introduced	53,661			100%	53,661
Total	57,700				54,469
	Total Units			Conversion cost
Ending WIP				% completed this period	Equivalent Units
Total	2,885			30%	866
Total EUP	60,585				55,334