FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The Smelting Department of Concord Company has the following production data for November.
Beginning work in process 3,300 units that are 100% complete as to materials and 20% complete as to conversion costs; units transferred out 9,400 units; and ending work in process 8,700 units that are 100% complete as to materials and 41% complete as to conversion costs.
Compute the equivalent units of production for (a) materials and (b) conversion costs for the month of November.
Expert Solution
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Step 1 Defination and formula
Meaning of equivalent units
The presence of opening or closing work in progress creates an accounting problem as to the ascertainment of cost per unit of output. To solve this problem the work in progress or uncompleted units are expressed in terms of completed units which are known as equivalent units of production
FORMULA
Equivalent units= No. of incomplete units * % of completion
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