Asked Jan 20, 2020

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 direct materials if materials are added at the beginning of the process?


Expert Answer

Step 1

Process costs

It is a method of cost accounting, which is used where the production is continuous, and the product needs various processes to complete. This method is used to ascertain the cost of the product at each process or stage of production.

Equivalents units for production

The activity of a processing department in terms of fully completed units is known as equivalent units. It includes the completed units of direct materials and conversion cost of beginning work in process, units completed and transferred out, and ending work in process.

Step 2

Calculate the equivalents units for direct materials for the month of July if the materials are added at the beginning of the process of Company ORS as shown below:


Accounting homework question answer, step 2, image 1
Step 3

Working note:


Accounting homework question answer, step 3, image 1

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