Equivalent Units of Conversion Costs

The Rolling Department of Jabari Steel Company had 5,995 tons in beginning work in process inventory (60% complete) on October 1. During October, 54,500 tons were completed. The ending work in process inventory on October 31 was 3,270 tons (20% complete).

What are the total equivalent units for conversion costs? Round to the nearest whole unit.

 units



To find the equivalent units for conversion costs in the Rolling Department, we can use the following formula:

\[
\text{Equivalent units for conversion costs} = \text{Units completed} + (\text{Ending WIP inventory} \times \text{Percentage complete})
\]

### Step 1: Given Data
- Beginning WIP inventory: 5,995 tons (60% complete, but we don't need this for equivalent units, only for costs if asked)
- Units completed: 54,500 tons
- Ending WIP inventory: 3,270 tons (20% complete)

### Step 2: Calculate Equivalent Units
We use the **units completed** and the partially completed units in ending inventory to calculate the total equivalent units.

\[
\text{Equivalent units} = 54,500 + (3,270 \times 0.20)
\]

Now, let’s compute that:

\[
\text{Equivalent units} = 54,500 + (654) = 55,154 \text{ tons}
\]

Thus, the total equivalent units for conversion costs are **55,154** units.

Would you like more details on any specific part of this process?

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Here are 5 related questions to explore further:
1. How do we calculate equivalent units if both materials and conversion costs are involved?
2. What is the role of percentage completion in calculating equivalent units?
3. How does the calculation change if the beginning WIP inventory percentage completion was higher?
4. What is the significance of equivalent units in process costing?
5. How are conversion costs different from material costs in process costing?

**Tip:** Always check the completion percentages carefully—they directly impact the equivalent units calculation!

The Rolling Department of Jabari Steel Company had 5,995 tons in beginning work in process inventory (60% complete) on October 1. During October, 54,500 tons were completed. The ending work in process inventory on October 31 was 3,270 tons (20% complete). What are the total equivalent units for conversion costs? Round to the nearest whole unit.

Learn how to calculate total equivalent units for conversion costs in the Rolling Department. This example involves 5,995 tons of beginning WIP inventory, 54,500 tons of completed units, and 3,270 tons of ending WIP inventory (20% complete). Suitable for college-level accounting students.

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