Equivalent Units of Materials Equivalent Units of Conversion
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![## Computing Equivalent Units of Production
**Problem Statement:**
Using the weighted-average method, compute the equivalent units of production under the following conditions:
- The beginning inventory consisted of 25,000 units.
- 55,000 units were started in production.
- 66,000 units were completed and transferred to finished goods inventory.
- Materials are added at the beginning of the process.
- The units are 40% complete with respect to conversion.
**Tasks:**
1. Determine the Equivalent Units of Materials.
2. Calculate the Equivalent Units of Conversion.
**Inputs:**
| Inputs | Values |
|--------------------------------|--------------|
| Beginning Inventory | 25,000 units |
| Units Started in Production | 55,000 units |
| Units Completed and Transferred| 66,000 units |
| Completion Percentage (Conversion) | 40% |
**Calculation Explanation:**
- **Equivalent Units of Materials:** Since materials are added at the beginning of the process, the equivalent units for materials will be equal to the total number of units in production (completed and transferred units + remaining work in process).
- **Equivalent Units of Conversion:** This is calculated based on the completion percentage with respect to conversion.
**Instructions:** Enter your computed results in the fields provided below:
- Equivalent Units of Materials: [ ]
- Equivalent Units of Conversion: [ ]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdb0a358f-0221-4ee2-a64a-34bb0f58912a%2F37028d3c-f524-41ac-9ce3-ffa68baca046%2Fan54f52_processed.jpeg&w=3840&q=75)
Transcribed Image Text:## Computing Equivalent Units of Production
**Problem Statement:**
Using the weighted-average method, compute the equivalent units of production under the following conditions:
- The beginning inventory consisted of 25,000 units.
- 55,000 units were started in production.
- 66,000 units were completed and transferred to finished goods inventory.
- Materials are added at the beginning of the process.
- The units are 40% complete with respect to conversion.
**Tasks:**
1. Determine the Equivalent Units of Materials.
2. Calculate the Equivalent Units of Conversion.
**Inputs:**
| Inputs | Values |
|--------------------------------|--------------|
| Beginning Inventory | 25,000 units |
| Units Started in Production | 55,000 units |
| Units Completed and Transferred| 66,000 units |
| Completion Percentage (Conversion) | 40% |
**Calculation Explanation:**
- **Equivalent Units of Materials:** Since materials are added at the beginning of the process, the equivalent units for materials will be equal to the total number of units in production (completed and transferred units + remaining work in process).
- **Equivalent Units of Conversion:** This is calculated based on the completion percentage with respect to conversion.
**Instructions:** Enter your computed results in the fields provided below:
- Equivalent Units of Materials: [ ]
- Equivalent Units of Conversion: [ ]
Expert Solution
Context:
Process costing: process costing is a costing method used by companies that produce homogeneous products by step by step processes like potato chips making companies
Equivalent units: Equivalent unit is the main concept in process costing Equivalent units which includes completed and non-completed units it is converted to fully completed units by multiplying the completed percentage of uncompleted units with the uncompleted units and adding to the completed units
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