Cargin Company uses the FIFO method in its process costing system. The Assembly Department started the month with 15,000 units in its beginning work in process inventory that were 50% complete with respect to conversion costs. An additional 91,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 7,000 units in the ending work in process inventory of the Assembly Department that were 20% complete with respect to conversion costs.
What were the equivalent units for conversion costs in the Assembly Department for the month?
Begining work in process inventory = 15,000 units
Conversion cost is 50% complete in last period, so in current period 50% is being done
So equivalent units for conversion in beginning inventory = 15,00050% = 7,500units Unit transfered to Asssmbly department for processing = 91,000 – 7,000 = 84,000 So equivalent unit for conversion cost for units in assembly department for processing = 84,000100 = 84,000units
Ending inventory in assembly department = 7,000 units
Conversion cost 20% complete
so equivalent units for conversion cost in ending inventory = 7,000*20% = 1,400units
Therefore the equivalent units for conversion costs in assembly department for the month
= 7,500 + 84,000 + 1,400