Equivalent Units of Production
The Converting Department of Worley Company had 560 units in work in process at the beginning of the period, which were 60% complete. During the period, 11,600 units were completed and transferred to the Packing Department. There were 640 units in process at the end of the period, which were 60% complete. Direct materials are placed into the process at the beginning of production.
Determine the number of equivalent units of production with respect to direct materials and conversion costs. If an amount is zero, enter in “0”.
| Whole Units | Direct Materials Equivalent Units |
Conversion Equivalent Units |
|
| Inventory in process, beginning | fill in the blank 1 | fill in the blank 2 | fill in the blank 3 |
| Started and completed | fill in the blank 4 | fill in the blank 5 | fill in the blank 6 |
| Transferred to Packing Department | fill in the blank 7 | fill in the blank 8 | fill in the blank 9 |
| Inventory in process, ending | fill in the blank 10 | fill in the blank 11 | fill in the blank 12 |
| Total | fill in the blank 13 | fill in the blank 14 |
In the context of cost accounting, equivalent units of production are a crucial concept used to determine the number of units that have completed the production process, either partially or completely. This calculation is essential for accurately allocating costs between work in process and finished goods. Let’s break down the calculation of equivalent units of production for both direct materials and conversion costs in the Converting Department of Worley Company.
We have 560 units in work in process at the beginning of the period, which were 60% complete.
Equivalent Units for Direct Materials: 560 units * 60% = 336 units
Equivalent Units for Conversion Costs: 560 units * 60% = 336 units
During the period, 11,600 units were completed and transferred to the Packing Department.
All these units are considered 100% complete for both direct materials and conversion costs.
Equivalent Units for Direct Materials: 11,600 units
Equivalent Units for Conversion Costs: 11,600 units
Similar to the “Started and Completed” category, these units are also 100% complete for both direct materials and conversion costs.
Equivalent Units for Direct Materials: 11,600 units
Equivalent Units for Conversion Costs: 11,600 units
There were 640 units in process at the end of the period, which were 60% complete.
Equivalent Units for Direct Materials: 640 units * 60% = 384 units
Equivalent Units for Conversion Costs: 640 units * 60% = 384 units
Now, let’s calculate the totals:
Total Equivalent Units for Direct Materials:
Inventory in Process, Beginning + Started and Completed + Transferred to Packing Department + Inventory in Process, Ending
336 + 11,600 + 11,600 + 384 = 23,920 equivalent units
Total Equivalent Units for Conversion Costs:
Inventory in Process, Beginning + Started and Completed + Transferred to Packing Department + Inventory in Process, Ending
336 + 11,600 + 11,600 + 384 = 23,920 equivalent units
So, the number of equivalent units of production with respect to direct materials and conversion costs in the Converting Department of Worley Company are as follows:
Equivalent Units for Direct Materials: 23,920 units
Equivalent Units for Conversion Costs: 23,920 units
These calculations are essential for accurately allocating and assigning costs to units in process and determining the cost per equivalent unit, which can then be used to calculate the total production costs.
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