Q.18-4SE - Horngren'S Financial And Managerial Accounting

Question

Question: Cadwell manufactures cell phones. The conversion costs to produce cell phones for November are added evenly throughout the process in the Assembly Department. The company uses the weighted-average method. For each of the following separate assumptions, calculate the equivalent units of production for conversion costs in the ending Work-in-Process Inventory for the Assembly Department:

1. 12,000 cell phones were 60% complete

2. 21,000 cell phones were 40% complete

 

Step-by-Step Solution

Answer

Answer: 

1. The equivalent unit of production when the 12,000 cell phones were 60% completed is 7,200 units.

2. The equivalent unit of production when the 21,000 cell phones were 40% completed is 8,400 units.

 

Step 1: Equivalent units of production for conversion cost when 12,000 cell phones were 60% completed

$$\begin{gathered} \mathit{E}\mathit{q}\mathit{u}\mathit{a}\mathit{l}\mathit{e}\mathit{n}\mathit{t}\mathbf{ }\mathit{u}\mathit{n}\mathit{i}\mathit{t}\mathbf{ }\mathit{o}\mathit{f}\mathbf{ }\mathit{p}\mathit{r}\mathit{o}\mathit{d}\mathit{u}\mathit{c}\mathit{t}\mathit{i}\mathit{o}\mathit{n}\mathbf{=}\mathit{N}\mathit{o}\mathbf{.}\mathbf{ }\mathit{o}\mathit{f}\mathbf{ }\mathit{u}\mathit{n}\mathit{i}\mathit{t}\mathit{s}\mathbf{\times }\mathit{P}\mathit{e}\mathit{r}\mathit{c}\mathit{e}\mathit{n}\mathit{t}\mathit{a}\mathit{g}\mathit{e}\mathbf{ }\mathit{o}\mathit{f}\mathbf{ }\mathit{c}\mathit{o}\mathit{m}\mathit{p}\mathit{l}\mathit{e}\mathit{t}\mathit{i}\mathit{o}\mathit{n} \\ \mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{=}\mathbf{12}\mathbf{,}\mathbf{000}\mathbf{\times }\mathbf{60}\mathbf{\%} \\ \mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{=}\mathbf{7}\mathbf{,}\mathbf{200} \end{gathered}$$

Step 2: Equivalent units of production for conversion cost when 21,000 cell phones were 40% completed

$$\begin{gathered} \mathit{E}\mathit{q}\mathit{u}\mathit{a}\mathit{l}\mathit{e}\mathit{n}\mathit{t}\mathbf{ }\mathit{u}\mathit{n}\mathit{i}\mathit{t}\mathbf{ }\mathit{o}\mathit{f}\mathbf{ }\mathit{p}\mathit{r}\mathit{o}\mathit{d}\mathit{u}\mathit{c}\mathit{t}\mathit{i}\mathit{o}\mathit{n}\mathbf{=}\mathit{N}\mathit{o}\mathbf{.}\mathbf{ }\mathit{o}\mathit{f}\mathbf{ }\mathit{u}\mathit{n}\mathit{i}\mathit{t}\mathit{s}\mathbf{\times }\mathit{P}\mathit{e}\mathit{r}\mathit{c}\mathit{e}\mathit{n}\mathit{t}\mathit{a}\mathit{g}\mathit{e}\mathbf{ }\mathit{o}\mathit{f}\mathbf{ }\mathit{c}\mathit{o}\mathit{m}\mathit{p}\mathit{l}\mathit{e}\mathit{t}\mathit{i}\mathit{o}\mathit{n} \\ \mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{=}\mathbf{12}\mathbf{,}\mathbf{000}\mathbf{\times }\mathbf{40}\mathbf{\%} \\ \mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{=}\mathbf{8}\mathbf{,}\mathbf{400} \end{gathered}$$