
Concept explainers
The process of presenting partially completed units in terms of completed units is referred to as determination of equivalent units. It includes both, partially and completed units of inventory, in finished inventory.
Requirement1: To compute the Equivalent units for Mixing department.
Solution:
Equivalent units of Material for Mixing department: 110,000 units.
Equivalent units of Conversion cost for Mixing department: 101,250 units.
Explanation: The computation of equivalent units for material and conversion cost for mixing department of L C Co. for May 2018 is as follows:
.
Requirement 2: The Equivalents units for Transferred-in cost, material and conversion cost for heating department.
Solution:
Equivalent units of transferred-in cost for heating department: 100,000 units
Equivalent units of Material cost for heating department: 92,800 units
Equivalent units of Conversion cost for heating department: 88,300 units
Explanation:
Now, the cost of units Completed and transferred out to Heating department is taken as Transferred-in cost for Heating department (another element of cost for department). The equivalent units for heating department of L C Co. are as follows:
.

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ACCOUNTING PRINCIPLES V1 6/17 >C<
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