Monga manufactures cell phones. The conversion costs to produce cell phones for

Question

Monga manufactures cell phones. The conversion costs to produce cell phones for November are added evenly throughout the process in the Assembly Department. The company uses the weighted-average method. For each of the following separate assumptions, calculate the equivalent units of production for conversion costs in the ending Work-in-Process Inventory for the Assembly Department: 1. 15,000 cell phones were 75% complete 2, 20,000 cell phones were 25% complete First, determine the formula for calculating equivalent units of production. (Abbreviation used: WIP-Work-in-Process Inventory) Eqivalent units of production Assumption 1. 15,000 cell phones were 75% complete The equivalent units for conversion costs is Assumption 2. 20,000 cell phones were 25% complete The equivalent units for conversion costs is

Explanation / Answer

Percentage complete x Number of units in ending WIP = Equivalent units of production

Assumption 1. Equivalent units for conversion costs = 75% x 15,000 = 11,250

Assumption 2. Equivalent units for conversion costs = 25% x 20,000 = 5,000

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