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# Equivalent units and costs

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Binding Company prints calendars. All direct materials are included at the inception of the printing process. There were 20,000 units in beginning inventory with a direct material cost of \$1,000 and conversion cost of \$3,760 in March. Direct materials totaled \$26,000 for the month. Conversion costs were \$20,000 Work-in-process records revealed that 160,000 calendars were started in March and that 144,000 were completed. Ending work-in-process units are complete with respect to direct materials costs and 40% complete with respect to conversion cost. The weighted-average method is used by Binding Company.
Required:

a. Determine the equivalent units of conversion.

b. What is the conversion costs assigned to completed calendars?

c. What amount of conversion is assigned to the ending work-in-
process inventory?

#### Solution Preview

a. Determine the equivalent units of conversion.

Equivalent units = Units completed X 100% + Units in ending inventory X percentage complete
Total units to account for = units in beginning inventory + units started = 20,000+160,000=180,000
Units ...

#### Solution Summary

The solution explains how to calculate the equivalent units and the assignment of costs to these units.

\$2.19