Department E had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. 14,000 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. The number of equivalent units of production for the period for conversion if the average cost method is used to cost inventories was:
A) 15,650
B) 14,850
C) 18,000
D) 17,250

Question

Quizplus · Accepted Answer

To calculate the equivalent units of production for conversion using the average cost method, we need to calculate the equivalent units of production for each element separately, i.e., materials and conversion.

For conversion:
Units completed + (Ending WIP x % complete) - Beginning WIP = Equivalent units of production
= 15,000 + (3,000 x 75%) - 4,000
= 15,000 + 2,250 - 4,000
= 13,250 equivalent units of production for conversion

Therefore, the total equivalent units of production would be:
Equivalent units of production for materials + Equivalent units of production for conversion
= 14,000 + 13,250
= 27,250

So, the answer is D) 17,250.

Department E Had 4,000 Units in Work in Process That