The Townson Manufacturing Company has gathered the following information for the month of September: 8,100 units in the beginning Work-in-Process Inventory (90% complete as to materials, 1/3 complete with respect to the conversion costs). 67,000 units were started into production. 57,000 units were completed and transferred to the next department. The ending Work-in-Process Inventory is complete as to materials but only 3/8 complete with respect to conversion costs. What are the equivalent units of production (EUPs) for materials in the month of September assuming Townson uses weighted-average process costing

Equivalent Units Production Cost = 63,787.5

Explanation:

To find out the Equivalent unit production first we have to calculate the ending inventory;

To compute the ending inventory

Transferred Units = Beginning Work in Process + Started Units - Ending Inventory

Ending Inventory = Beginning Work in Process + Started Units - Transferred Units

Ending Inventory = 8100 + 67000 - 57000

Ending Inventory = 18,100

To compute the Equivalent unit production;

Equivalent Units Production Cost = Transferred Units + (3/8 × Ending Inventory)

Equivalent Units Production Cost = 57,000 + (3/8 × 18,100)

Equivalent Units Production Cost = 63,787.5

The equivalent unit of production = 63,787.5 units

Explanation:

Given Data:

Unit transferred out = 57,000 units

Beginning work = 8,100 units

units started = 67,000 units

Units transferred out = beginning work + units started - Ending inventory

57,000 =8,100  + 67,000 - Ending inventory

57,000 = 75100 - Ending inventory

Ending inventory =75100 -57,000

                              = 18,100

Equivalent units of production for conversion cost  = Units transferred out + (3/8 * ending inventory)

                                                                             = 57,000 + (3/8 * 18,100)

                                                                              = 57,000 + 6787.5

                                                                              = 63,787.5

Therefore, the equivalent unit of production = 63,787.5 units

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

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