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The Rolling Department of Kraus Steel Company had 200 tons in beginning work in process inventory (60% complete) on October 1. During October, 3,900 tons were completed. The ending work in process inventory on October 31 was 300 tons (25% complete). What are the total equivalent units for conversion costs?

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Answer:

$3,855

Explanation:

Calculation to determine the total equivalent units for conversion costs

Whole Units Percent conversion added in period Equivalent units for Conversion

Inventory in process , beginning

200 40% (100-60%) 80 (200*40%)

Started and completed in October

3,700 100% 3,700 (3,700*100%])

Transferred out of rolling 3,900 $0 $0

Inventory in process, Ending 300 25% 75 (300*25%)

Total Equivalent units for conversion $3,855

(80+3,700+75)

Workings:

Calculation to determine the Started and completed

Using this formula

Started and completed = Total completed - Beginning inventory

Let plug in the formula

Started and completed= 3,900 - 200

Started and completed = 3,700

Therefore the total equivalent units for conversion costs is $3,855

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