If a department that uses process costing starts the reporting period with 100,000 physical units that were 20% complete with respect to direct labor, the equivalent units of direct labor in beginning Work in Process are 20,000.

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Quizplus · Accepted Answer

This statement is true according to the principles of process costing. When calculating equivalent units in process costing, the percentage of completion for direct labor is taken into account, along with other factors such as materials and overhead. Therefore, if a department starts the period with 100,000 physical units that are 20% complete for direct labor, the equivalent units of direct labor in beginning Work in Process would be 20,000.

If a Department That Uses Process Costing Starts the Reporting