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The beginning inventory consisted of 20,000 units, 40 percent complete and the ending inventory consisted of 12,000 units, 50 percent complete. There were 30,000 units
The beginning inventory consisted of 20,000 units, 40 percent complete and the ending inventory consisted of 12,000 units, 50 percent complete. There were 30,000 units started during the period. Determine the equivalent units of conversion in process. Formulas 1. Cost per equivalent unit = Costs for the Period / Equivalent Units of Production for the period 2. Conversion costs = Direct Labor + Manufacturing Overhead 3. Units completed/transferred out + Equivalent units of ending work in process = Equivalent units of production 4. Predetermined Overhead rate Estimated Overheads / Estimated Allocation Base (Activity Level) 5. Applied Overhead = Predetermined Overhead Rate x Actual Allocation Base (Activity level) 6. Profit = (Price x Quantity) - (Variable Costs + Fixed Costs) 7. Unit contribution margin = Unit Selling Price - Unit Variable Cost 8. Contribution Margin Ratio = Unit Contribution Margin / Unit Selling Price 9. Break-even point (units) = Fixed Costs / Unit Contribution Margin 10. Break-even point (dollars) = Fixed Costs / CM Ratio = 11. Margin of safety Total sales - Break-even sales 32,000 38,000 20,000 44,000
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