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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.

#### 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