The Assembly Department of Zedco Ltd

question 230

Essay

The Assembly Department of Zedco Ltd. had 45,000 partially completed units in work in process at the end of October. Only 50% of the direct materials had been added to these units, and the units were 55% of the way through the conversion process. In addition, 425,000 units had been completed and transferred out of the Baking Department to the Packaging Department during the month.
Required:
A. What are the total equivalent units for direct materials?
B. At the end of the year, what are the equivalent units for conversion costs?

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Definitions:

Spot Rates

The current market price at which a particular asset can be bought or sold for immediate delivery.

Hedged Date

The date on which a hedge transaction is initiated to protect against future fluctuations in value.

Foreign Exchange Hedge

A financial transaction implemented to protect an investment or business operation from adverse movements in exchange rates.

Foreign Currency Futures

Financial contracts to exchange currencies on a specified future date at a predetermined price.