At the beginning of June, 6,000 diamonds were in process. During June, an additional 9,000 diamonds were started. 7,000 diamonds were completed and transferred to finished goods. As of the beginning of the month, work in process was 80% complete with respect to materials and 60% complete with respect to conversion costs. As of the end of the month, work in process was 50% complete with respect to materials and 30% complete with respect to conversion costs. Calculate the equivalent units of direct labor for June.

9,400 units

Explanation:

Equivalent units are physical units expressed as a percentage of work done on then. In this case we express the physical outputs as percentage of direct labor.

Step 1: Ending Work in Process units calculation :

Ending Work in Process units = 6,000 +  9,000  - 7,000

                                                   = 8,000

Step 2 : Equivalent units of direct labor for June calculation:

Completed and transferred (7,000 x 100%)             7,000

Ending Work in Process (8,000 x 30%)                    2,400

Equivalent units of production                                  9,400

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