The Converting Department of Homebrite Towel and Tissue Company had 840 units in work in process at the beginning of the period, which were 75% complete. During the period, 14,600 units were completed and transferred to the Packing Department. There were 900 units in process at the end of the period, which were 30% complete. Direct materials are placed into the process at the beginning of production. Determine the number of equivalent units of production with respect to direct materials and conversion costs.
Answer:
WholeUnitsEquivalent UnitsDirectMaterials ConversionInventory in process, beginning(75% completed) 840 0 2101Started and completed 13,7602 13,760 13,760Transferred to Packing Department 14,600 13,760 13,970Inventory in process, ending(30% completed) 900 900 2703Total 15,500 14,660 14,2401 840 units × (1 – 75%)2 14,600 units – 840 units3 900 units × 30%
