Cohen Manufacturing is trying to determine the equivalent units for conversion costs with 3,000 units of ending work in process at 80% completion and 21,000 physical units that are 100% complete as to materials. There are no beginning units in the department. Materials are added at the beginning of the process, and conversion costs occur evenly throughout the entire production period. What is the equivalent units for conversion costs for the current period?
A) 24,000.
B) 23,400.
C) 2,400.
D) 20,400.

Question

Quizplus · Accepted Answer

- First, we need to determine the equivalent units for materials for the current period, which is equal to the number of physical units since all of them are 100% complete. Therefore, equivalent units for materials = 21,000.
- To determine the equivalent units for conversion costs, we need to consider both the completed units and the partially completed units at the end of the period.
- For the completed units, all conversion costs are 100% complete as well. Therefore, equivalent units for conversion costs for completed units = 21,000.
- For the partially completed units, we need to calculate the equivalent units based on their percentage of completion. The ending work in process consists of 3,000 units at 80% completion, which is equivalent to 2,400 units of completed conversion costs (3,000 units x 80%). Therefore, equivalent units for conversion costs for partially completed units = 2,400.
- Finally, we can add the equivalent units for completed units and partially completed units to get the total equivalent units for conversion costs: 21,000 + 2,400 = 23,400.

Cohen Manufacturing Is Trying to Determine the Equivalent Units for Conversion