Equivalent Units of Conversion Costs The Filling Department of Eve Cosmetics Company had 4,000 ounces in beginning work in process inventory (60% complete). During the period, 46,000 ounces were completed. The ending work in process inventory was 8,000 ounces (25% complete). What are the total equivalent units for conversion costs? If required, round to the nearest unit.

The total equivalent units for conversion cost = 45,600 ounces

Explanation:

Let us arrange the information in a tabular form to help in solution:

                                                                        % conversion    equivalent units

Particulars                              whole units       completed      for conversion

Beginning inventory in process      4,000                  40%                    1,600

started and completed in period  42,000**               100%                42,000

completed . . . . . . . . . . . . . . . . . .    46,000                                           43,600

ending inventory in process . . . .    8,000                   25%                   2,000

Total units to be assigned cost    54,000                                           45,600                      

Therefore, the total equivalent units for conversion cost = 45,600 ounces

**Note the inventory that was started and completed within the period is the inventory that was 100% completed within the period and it is the difference between the total inventory completed within the period and the beginning inventory, and this is represented as:

46,000 - 4,000 = 42,000 ounces.

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