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    Equivalent Units

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    Motormania makes diesel engines.
    All direct materials are introduced at the start of the process.
    Conversion costs are incurred evenly throughout the process.
    May 1 there was no beginning WIP inventory, but 485,000 units were started.
    At the end of May, there were 90,000 units still in process at the 70% stage of completion.
    Total costs incurred during May amounted to $1,212,500 for materials and $3,664,000 for conversion costs.

    Calculate:

    1. Units completed and transferred
    2. Equivalent units of materials and conversions
    3. Cost per equivalent unit of materials and conversion
    4. Cost of a completed unit.

    © BrainMass Inc. brainmass.com November 24, 2021, 1:07 pm ad1c9bdddf
    https://brainmass.com/business/management-accounting/equivalent-units-costs-unit-141806

    Solution Preview

    1. Units completed and transferred

    Total units started are 485,000 and 90,000 are in ending WIP. The units finished and transferred are 485,000-90,000=395,000.

    2. Equivalent units of materials and ...

    Solution Summary

    The solution explains how to calculate the equivalent units and the costs per unit.

    $2.49

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