Ending WIP Inventory has 100 units that are 70% complete for direct materials and 20% complete for conversion costs. For calculating costs per equivalent unit, which of the following statements is true?
A)The denominator would include 100 units for both.
B)The denominator would include 70 units for direct materials and 20 for conversion.
C)The denominator would include 20 units for direct materials and 80 for conversion.
D)You cannot determine what constitutes the denominator.

Question

Quizplus · Accepted Answer

The equivalent units for direct materials are 70 (100 units * 70%), and for conversion costs, they are 20 (100 units * 20%).

Ending WIP Inventory Has 100 Units That Are 70% Complete