Ozdemir Corporation uses the first-in, first-out method in its process costing system. Data concerning the first processing department for the most recent month are listed below: What are the equivalent units for conversion costs for the month in the first processing department?

A) 1,015
B) 5,050
C) 6,920
D) 7,450

The equivalent units for conversion costs are calculated by converting the partially completed units in terms of the amount of conversion costs that have been incurred on them.
Equivalent units for conversion costs = Units completed and transferred out + (Units in ending work in process inventory x percentage of completion for conversion costs)
Units completed and transferred out = 25,000 units
Units in ending work in process inventory = 2,300 units
Percentage of completion for conversion costs = 80%
Equivalent units for conversion costs = 25,000 + (2,300 x 0.80) = 6,920 units