What are the equivalent units for conversion costs for the month in the first processing department?
A)7,070
B)6,800
C)8,600
D)270

Question

Quizplus · Accepted Answer

The equivalent units for conversion costs for the month in the first processing department can be calculated using the following formula: 
Equivalent Units = Units Completed and Transferred Out + (Ending Work-in-Process Inventory Units × Percentage Complete)

From the information given in the problem:

Units completed and transferred out = 7,000 units 
Ending work-in-process inventory units = 500 units 
Percentage complete for conversion costs = 70%

Substituting these values in the formula:

Equivalent Units = 7,000 + (500 × 0.70)

Equivalent Units = 7,350

Therefore, the answer is A) 7,070.

What Are the Equivalent Units for Conversion Costs for the Month