Production: Beginning inventory 1,600 units that are 100% complete as to materia

Question

Production: Beginning inventory 1,600 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 18,400; ending inventory of 5,000 units 10% complete as to conversion costs.
Manufacturing costs: Beginning inventory costs, comprised of $20,000 of materials and $43,180 of conversion costs; materials costs added in Polishing during the month, $177,200; labor and overhead applied in Polishing during the month, $102,680 and $257,140, respectively.

Explanation / Answer

Ending inventory: 5,000*0.10 = 500 equivalent units Completed and transferred: 1,600 + 18,400 – 5,000 = 15,000, which is 15,000 equivalent units Equivalent units = 500 + 15,000 = 15,500 Total conversion costs = 43,180 + 102,680 + 257,140 = 403,000 403,000/15,500 = $26 per equivalent unit

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