Chen Company manufactures keyboards in a two-department process, Assembly and Finishing. Information on the first department, Assembly, follows:
There was no beginning inventory, and of the 200,000 units started in production 168,000 were completed and transferred to the Finishing department, while 32,000 units were still in process. These units had all materials added but were only 75 percent complete as far as conversion costs.
-The equivalent units for conversion costs are
A) 200,000.
B) 168,000.
C) 192,000.
D) 32,000.

Question

Chen Company manufactures keyboards in a two-department process, Assembly and Finishing. Information on the first department, Assembly, follows:
  There was no beginning inventory, and of the 200,000 units started in production 168,000 were completed and transferred to the Finishing department, while 32,000 units were still in process. These units had all materials added but were only 75 percent complete as far as conversion costs.
-The equivalent units for conversion costs are
A) 200,000. 
B) 168,000. 
C) 192,000. 
D) 32,000.

Quizplus · Accepted Answer

The equivalent units for conversion costs are the units that are partially completed and need additional work to be fully completed. In this case, 168,000 units were fully completed and transferred to the Finishing department, while 32,000 units were only 75% complete. Therefore, the equivalent units for conversion costs would be 168,000 + (32,000 x 0.75) = 192,000.

Chen Company Manufactures Keyboards in a Two-Department Process, Assembly and Finishing