3) The packaging department at Banana Inc. had 840 units in work in process at t

Question

3) The packaging department at Banana Inc. had 840 units in work in process at the beginning of the period, which were 70% complete. During the period 14,900 units were completed and transferred to the shipping department. There were 1,200 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. (10 points)

Explanation / Answer

Calculation of Equivalent units of production with respect to direct materials :

It is given in the question that direct materials are placed into the process at the beginning of production. Means the opening work in process will have 0% of the direct materials introduced in this period and the closing work in process will have 100% of the direct materials introduced in this period.

opening work in process

[840*0%]

completed and transferred to the shipping department

[14,900*100%]

closing work in process

[1,200*100%]

Calculation of equivalent units of prodution with respect to conversion costs:

it is given that opening work in process is 70% complete, which means the remaining 30% is completed in this period and closing work in process is 30% complete, which means the entire 30% of it is completed in this period

opening work in process

[840*(100-70)%]

completed and transferred to the shipping department

[14,900*100%]

closing work in process

[1,200*30%]

particulars equivalent units

opening work in process

[840*0%]

0

completed and transferred to the shipping department

[14,900*100%]

14,900

closing work in process

[1,200*100%]

1,200 total 16,100

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