Equivalent Units—Process Costing Assume that you are the owner and sole employee of a lube, oil, and filter service business that you run out of your home. Currently, you are running a spring special on a “super maintenance service” on cars. The maintenance service you offer is quite comprehensive and includes (among other things) changing the oil, rotating the tires, topping off all fluids, and washing and waxing each car. It takes about one to two hours to complete a car. With the great price you’re offering on this service, you immediately find yourself with about five days of customer order backlog. To catch up, you decide to spend the next week working solely on the “super maintenance service.” Further, you want to track your output to see if you can improve the amount of maintenance work you do each of the next five days.

When you come to work the following Monday, you have one car that is about 70%

complete. At the end of the week, the results are as follows:

How much work did you get done each day? In other words, how many equivalent units of production did you have each day?

Transcribed Image Text:

Monday Tuesday Wednesday Thursday Friday. Total Cars Completed Each Day 5 End-of-Day Car in Process 50% complete 65767 80% complete 10% complete 80% complete 10% complete