Sanchez, Inc.uses process costing.Equivalent units for its Molding Department totaled 18,600 during January for conversion costs.15,000 units were transferred out of the Molding Department to the Finishing Department during the month.If the items remaining in ending Work in Process Inventory in the Molding Department are 40% complete as to conversion costs and 80% complete as to materials, how many physical units are there in ending Work in Process inventory in the Molding Department?
A)24,000 units
B)15,000 units
C)4,500 units
D)9,000 units

Question

Quizplus · Accepted Answer

To find the physical units in ending Work in Process inventory, we can use the given information about equivalent units for conversion costs. The formula to calculate the physical units in ending inventory is: Equivalent units for conversion costs = Units transferred out + (Ending Work in Process Inventory * % completion for conversion costs). Rearranging the formula to solve for the Ending Work in Process Inventory gives us: Ending Work in Process Inventory = (Equivalent units for conversion costs - Units transferred out) / % completion for conversion costs = (18,600 - 15,000) / 40% = 3,600 / 0.4 = 9,000 units.