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Audrey Auto Accessories Manufactures Plastic Moldings for Car Seats What Were the Equivalent Units of Direct Materials and Conversion

question 139

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Audrey Auto Accessories manufactures plastic moldings for car seats.Its costing system uses two cost categories,direct materials and conversion costs.Each product must pass through Department A and Department B.Direct materials are added at the beginning of production.Conversion costs are allocated evenly throughout production. $\begin{array}{ll}\text { Datafor Department A for Februay } 2015 \text { are: }\\\text { Work in process, beginning inventory, } 40 \% \text { converted } & 200 \text { units } \\\text { Units started during February } & 800 \text { units } \\\text { Work in process, ending inventory: } & 100 \text { units } \\30 \% \text { complete as to conversion costs } & \\\quad 100 \% \text { complete as to materials } &\\\\\text { Costs for the Department A for February } 2015 \text { are: }\\\text { Work in process, beginuing inventory: }\\{\text { Direct materials }} & \$ 600,000 \\\quad \text { Conversion costs } & \$ 150,000 \\\text { Direct materials costs added during February } & \$ 4,000,000 \\\text { Conversion costs added during February } & \$ 2,250,000\end{array}$ What were the equivalent units of direct materials and conversion costs,respectively,at the end of February? Assume Audrey uses the weighted-average process costing method.

Definitions:

Ending Finished Goods Inventory

The value of goods that have been completed but not yet sold at the end of an accounting period.

Ending Raw Materials Inventory

The value of raw materials that remain unsold and available for use at the end of an accounting period.

Expected Cash Collections

The amount of cash a company anticipates receiving over a specified period, often based on sales forecasts.

Budgeted Selling Price

The anticipated price at which a product will be sold, factoring in production and marketing costs to determine profitability.