Appendix EX 20-23 Equivalent units of production: average cost method

The Converting Department of Tender Soft Tissue Company uses the average cost method and had 1,900 units in work in process that were 60% complete at the beginning of the period. During the period, 15,800 units were completed and transferred to the Packing Department. There were 1,200 units in process that were 30% complete at the end of the period

a. Determine the number of whole units to be accounted for and to be assigned costs for the period.

b. Determine the number of equivalent units of production for the period.


Answer:

a. and b.
a. Whole
Units
b. Equivalent Units
of Production
Units to be accounted for:
Beginning work in process 1,900
Units started during period 15,1001
Total 17,000
Units to be assigned costs:
Transferred to Packing Department 15,800 15,800
Inventory in process, ending
(30% completed) 1,200 3602
Total 17,000 16,160
1 15,800 units – 1,900 units + 1,200 units
2 30% × 1,200 units