Double Eagle Corporation produces the prestigious “Double Eagle” golf ball in on

Question

Double Eagle Corporation produces the prestigious “Double Eagle” golf ball in one department using a process costing system. At the beginning of January, 10,000 golf balls were in work-in-process. During January, 20,000 more golf balls were started. The ending work-in-process included 6,000 balls which were 100 percent completed for direct materials, 75 percent completed for direct labor, and 75 percent completed for overhead.

The following table lists the cost information for Department A.

Materials Labor Overhead
Beginning Work-in-Process $10,000 $2,000 $3,200
Costs Added During January 20,000 5,125 8,200

Calculate the equivalent units for overhead in the ending-in-process.

Explanation / Answer

6000 golf balls were in the ending work-in-process inventory. They were 75% completed for overhead, so the equivalent units for overhead in the ending in process inventory is: 6000*0.75 = 4500

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