Lotz Painting Company has the following production data for March: • Beginning work in process, 0 units • Units transferred out, 42,000 • Units in ending work in process, 10,000, which are 80% complete for conversion costs Materials are added only at the beginning of the process

Accounting Oct 08, 2020

Lotz Painting Company has the following production data for March: • Beginning work in process, 0 units • Units transferred out, 42,000 • Units in ending work in process, 10,000, which are 80% complete for conversion costs Materials are added only at the beginning of the process. Instructions Compute equivalent units of production for both materials and conversion costs.

Expert Solution

Computation of the equivalent units of production for materials costs:-

Equivalent units = Units transferred out + Ending work in process

= 42,000 + 10,000

= 52,000 units

Computation of the equivalent units of production for conversion costs:-

Equivalent units = Units transferred out + (Ending work in process*% of completion)

= 42,000 + (10,000*80%)

= 42,000 + 8,000

= 50,000 units

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