The Assembly Department of Smart Computers had a beginning inventory of 5,000 units. During November, it assembled 2,000 units and transferred them to the Packaging Department. It incurred $250,000 in direct materials and $75,000 in conversion costs. The ending inventory in November was 3,000 units which were 100% and 60% complete with respect to materials and conversion costs, respectively. Calculate the total equivalent units of production for conversion costs for November.
A)2,000 units
B)5,000 units
C)3,800 units
D)1,800 units

Question

Quizplus · Accepted Answer

To calculate the equivalent units of production for conversion costs, we need to first calculate the equivalent units for materials and conversion costs separately:
- Materials: 2,000 units assembled + 3,000 units in ending inventory (100% complete) = 5,000 equivalent units of production for materials
- Conversion costs: 
  - Units in ending inventory that are 100% complete = 3,000 units x 60% = 1,800 equivalent units 
  - Units transferred to the Packaging Department = 2,000 equivalent units
  Total equivalent units of production for conversion costs = 1,800 + 2,000 = 3,800 units.

Therefore, the correct answer is C) 3,800 units.

The Assembly Department of Smart Computers Had a Beginning Inventory