ECONOMICS

Detailed explanation-1: -To calculate the goods transferred out, simply take the units transferred out times the sum of the two equivalent unit costs (materials and conversion) because all items transferred to the next department are complete with respect to materials and conversion, so each unit brings all its costs.

Detailed explanation-2: -To simply calculate equivalent units, you can multiply the number of physical items by the percentage of the work done on them. For two items that are 50% done, you would have one equivalent unit (2 x 50% = 1). When the items are completely finished, the number of equivalent units is equal to the physical items.

Detailed explanation-3: -An accountant or manager deducts the asset’s salvage value from its original cost, and this total provides the depreciable cost of the asset. Managers must then divide this depreciable cost by the life span in units or hours. The resulting number is the average unit of production.

Detailed explanation-4: -In the given situation, % of completion is 60% of 1000 units. Therefore 600 units are to be considered as equivalent units.