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Equivalent Units of Production

Data for the two departments of Gurley Industries for September of the current fiscal year are as follows:

Drawing Department Winding Department
Work in process, September 1 8,000 units, 20% completed 3,600 units, 85% completed
Completed and transferred to next
processing department during September 109,600 units 108,300 units
Work in process, September 30 6,100 units, 85% completed 4,900 units, 25% completed
Production begins in the Drawing Department and finishes in the Winding Department.

Question Content Area
a. If all direct materials are placed in process at the beginning of production, determine the direct materials and conversion equivalent units of production for September for the Drawing Department. If an amount is zero, enter in "0".

Drawing Department
Direct Materials and Conversion Equivalent Units of Production
For September
Line Item Description Whole Units Direct Materials
Equivalent Units Conversion
Equivalent Units
Inventory in process, September 1 Inventory in process, September 1
8,000
Inventory in process, September 1
Inventory in process, September 1
6,400
Started and completed in September Started and completed in September
101,600
Started and completed in September
101,600
Started and completed in September
101,600
Transferred to Winding Department in September Transferred to Winding Department in September
109,600
Transferred to Winding Department in September
Transferred to Winding Department in September
108,000
Inventory in process, September 30 Inventory in process, September 30
6,100
Inventory in process, September 30
6,100
Inventory in process, September 30
5,185
Total Total
115,700
Total
107,700
Total
113,185
Feedback Area
Feedback
When are the materials added to the units? How much more needs to be done to the beginning units with respect to conversion costs to complete the units? How much has been added to the units in ending work in process inventory with respect to materials and conversion?

Question Content Area
b. If all direct materials are placed in process at the beginning of production, determine the direct materials and conversion equivalent units of production for September for the Winding Department. If an amount is zero, enter in "0".

Winding Department
Direct Materials and Conversion Equivalent Units of Production
For September
Line Item Description Whole Units Direct Materials
Equivalent Units Conversion
Equivalent Units
Inventory in process, September 1 Inventory in process, September 1
3,600
Inventory in process, September 1
Inventory in process, September 1
3,600
Started and completed in September Started and completed in September
104,700
Started and completed in September
104,700
Started and completed in September
104,700
Transferred to finished goods in September Transferred to finished goods in September
108,300
Transferred to finished goods in September
Transferred to finished goods in September
Inventory in process, September 30 Inventory in process, September 30
4,900
Inventory in process, September 30
4,900
Inventory in process, September 30
1,225
Total Total
113,200
Total
109,600
Total

1 answer

To determine the direct materials and conversion equivalent units of production for the Drawing Department and Winding Department, we will follow the weighted average method, taking into account the units completed and the units still in process along with their completion percentages.

a. Drawing Department:

  1. Calculate Equivalent Units of Production for Direct Materials:

    • Beginning Inventory: 8,000 units (100% for materials)
    • Started and Completed: 101,600 units (100% for materials)
    • Ending Inventory: 6,100 units (100% for materials)

    \[ \text{Total Direct Materials Equivalent Units} = \text{Beginning Inventory} + \text{Started and Completed} + \text{Ending Inventory} \] \[ = 8,000 + 101,600 + 6,100 = 115,700 \]

  2. Calculate Equivalent Units of Production for Conversion Costs:

    • Beginning Inventory: 8,000 units (80% remaining for conversion -> 8,000 * 0.80 = 6,400)
    • Started and Completed: 101,600 units (100% for conversion)
    • Ending Inventory: 6,100 units (15% completed for conversion -> 6,100 * 0.15 = 915)

    \[ \text{Total Conversion Equivalent Units} = \text{Conversion of Beginning Inventory} + \text{Started and Completed} + \text{Conversion of Ending Inventory} \] \[ = 6,400 + 101,600 + 915 = 109,915 \]

Drawing Department Summary:

\[ \begin{align*} \text{Whole Units} & \ \text{Inventory in process, September 1} & \quad 8,000 \ \text{Started and completed in September} & \quad 101,600 \ \text{Transferred to Winding Department in September} & \quad 109,600 \ \text{Inventory in process, September 30} & \quad 6,100 \ \text{Total} & \quad 115,700 \ \ \text{Direct Materials Equivalent Units} & \quad 115,700 \ \text{Conversion Equivalent Units} & \quad 109,915 \ \end{align*} \]

b. Winding Department:

  1. Calculate Equivalent Units of Production for Direct Materials:

    • Beginning Inventory: 3,600 units (100% for materials)
    • Started and Completed: 104,700 units (100% for materials)
    • Ending Inventory: 4,900 units (100% for materials)

    \[ \text{Total Direct Materials Equivalent Units} = \text{Beginning Inventory} + \text{Started and Completed} + \text{Ending Inventory} \] \[ = 3,600 + 104,700 + 4,900 = 113,200 \]

  2. Calculate Equivalent Units of Production for Conversion Costs:

    • Beginning Inventory: 3,600 units (15% remaining for conversion -> 3,600 * 0.15 = 540)
    • Started and Completed: 104,700 units (100% for conversion)
    • Ending Inventory: 4,900 units (75% completed for conversion -> 4,900 * 0.75 = 3,675)

    \[ \text{Total Conversion Equivalent Units} = \text{Conversion of Beginning Inventory} + \text{Started and Completed} + \text{Conversion of Ending Inventory} \] \[ = 540 + 104,700 + 3,675 = 108,915 \]

Winding Department Summary:

\[ \begin{align*} \text{Whole Units} & \ \text{Inventory in process, September 1} & \quad 3,600 \ \text{Started and completed in September} & \quad 104,700 \ \text{Transferred to finished goods in September} & \quad 108,300 \ \text{Inventory in process, September 30} & \quad 4,900 \ \text{Total} & \quad 113,200 \ \ \text{Direct Materials Equivalent Units} & \quad 113,200 \ \text{Conversion Equivalent Units} & \quad 108,915 \ \end{align*} \]

If any adjustments are needed to the values based on more specific completion percentages or the operational flow within the company, please update the calculations accordingly.