Question

eBook Show Me How
Question Content Area
Equivalent Units of Production

The Converting Department of Toren Company had 1,040 units in work in process at the beginning of the period, which were 40% complete. During the period, 21,600 units were completed and transferred to the Packing Department. There were 1,160 units in process at the end of the period, which were 60% complete. Direct materials are placed into the process at the beginning of production.

Determine the number of equivalent units of production with respect to direct materials and conversion costs. If an amount is zero, enter in "0".

Toren Company
Number of Equivalent Units of Production

Line Item Description Whole Units Direct Materials
Equivalent Units Conversion
Equivalent Units
Inventory in process, beginning Inventory in process, beginning
1,040
Inventory in process, beginning
0
Inventory in process, beginning
416
Started and completed Started and completed
20,560
Started and completed
20,560
Started and completed
20,560
Transferred to Packing Department Transferred to Packing Department
21,600
Transferred to Packing Department
Transferred to Packing Department
Inventory in process, ending Inventory in process, ending
1,160
Inventory in process, ending
1,160
Inventory in process, ending
696
Total Total
22,760
Total
21,720
Total
22,296

Answer 1

To determine the number of equivalent units of production (EUP) for the Converting Department of Toren Company, we need to analyze both direct materials and conversion costs separately.

### Step 1: Calculate Equivalent Units for Direct Materials

Direct materials are added at the beginning of the process, so:

1. **Beginning Work in Process (BWIP)**: 1,040 units (100% complete with respect to materials)
2. **Started and Completed**: 21,600 units (100% complete with respect to materials)
3. **Ending Work in Process (EWIP)**: 1,160 units (100% complete with respect to materials)

#### Calculation for Direct Materials:

- **Equivalent Units from Beginning WIP**: 1,040 EUP
- **Equivalent Units from Started and Completed**: 21,600 EUP
- **Equivalent Units from Ending WIP**: 1,160 EUP

**Total Equivalent Units for Direct Materials**:

\[
1,040 + 21,600 + 1,160 = 23,800 \text{ EUP}
\]

### Step 2: Calculate Equivalent Units for Conversion Costs

For conversion costs, we need to consider the percentage of completion:

1. **Beginning Work in Process (BWIP)**: 1,040 units (40% complete)
2. **Started and Completed**: 21,600 units (100% complete)
3. **Ending Work in Process (EWIP)**: 1,160 units (60% complete)

#### Calculation for Conversion Costs:

- **Equivalent Units from Beginning WIP**:
\[
1,040 \text{ units} \times (100\% - 40\%) = 1,040 \times 0.60 = 624 \text{ EUP}
\]

- **Equivalent Units from Started and Completed**:
\[
21,600 \text{ units} \times 100\% = 21,600 \text{ EUP}
\]

- **Equivalent Units from Ending WIP**:
\[
1,160 \text{ units} \times 60\% = 1,160 \times 0.60 = 696 \text{ EUP}
\]

**Total Equivalent Units for Conversion Costs**:

\[
624 + 21,600 + 696 = 22,920 \text{ EUP}
\]

### Summary of Calculated Equivalent Units of Production

- **Total Equivalent Units for Direct Materials**: 23,800 EUP
- **Total Equivalent Units for Conversion Costs**: 22,920 EUP

### Final Table Layout

| Line Item Description | Whole Units | Direct Materials Equivalent Units | Conversion Equivalent Units |
|-------------------------------------------|-------------|----------------------------------|----------------------------|
| Inventory in process, beginning | 1,040 | 1,040 | 624 |
| Started and completed | 21,600 | 21,600 | 21,600 |
| Transferred to Packing Department | 21,600 | 23,800 | 22,920 |
| Inventory in process, ending | 1,160 | 1,160 | 696 |
| **Total** | 22,760 | **23,800** | **22,920** |

Use these calculations to fill in values as required.