Units completed and transferred out this period
Ivanhoe Co. started 3,240 units during the period. Its beginning inventory is 540 units one-fourth complete as to conversion costs and 100% complete as to materials costs. Its ending inventory is 324 units one-fifth complete as to conversion costs and 100% complete as to materials costs. How many units were completed and transferred out this period?
Sample Solution
Beginning inventory: 540 units, one-fourth complete as to conversion costs and 100% complete as to materials costs Ending inventory: 324 units, one-fifth complete as to conversion costs and 100% complete as to materials costsBeginning inventory: 540 units, one-fourth complete as to conversion costs and 100% complete as to materials costs
Ending inventory: 324 units, one-fifth complete as to conversion costs and 100% complete as to materials costs
Step 1: Calculate the equivalent completed units of beginning inventory
Equivalent Completed Units (BCU) of the beginning inventory = 540 * 4/5 = 432 units
Step 2: Calculate the equivalent completed units of ending inventory
Equivalent Completed Units (ECU) of the ending inventory = 324 * 5/4 = 405units
Step 3: Calcualte number of units that are completed and transferred out during this period.
Number of Completed and Transferred Out Units = BCU + Started – ECU
=432+3240-405
=3367 units