Direct materials are added at the beginning of the process. There are 10,000 units in ending WIP inventory that are 75% complete with regard to conversion costs. The equivalent units in ending WIP are: Direct Materials Conversion Costs
A)10,000 7,500
B)7,500 7,500
C)10,000 10,000
D)7,500 10,000

Question

Quizplus · Accepted Answer

Direct materials are added at the beginning, so all 10,000 units are 100% complete for direct materials. For conversion costs, the units are 75% complete, so equivalent units are 7,500 (10,000 units * 75%).

Direct Materials Are Added at the Beginning of the Process