A process with 1,200 units of beginning work in process, completed and transferred out 15,000 units during a period. There were 7,500 units in the ending work in process that were 50% complete as to conversion costs. Materials are added 80% at the beginning of the process and 20% when the units are 90% complete. How much is equivalent units of production for the period for material costs?
A) 18,000 equivalent units.
B) 22,500 equivalent units.
C) 16,500 equivalent units.
D) 21,000 equivalent units.

Question

Quizplus · Accepted Answer

Equivalent units of production for materials = (units completed and transferred out) + (ending work in process x percentage complete for materials)

= (15,000) + (7,500 x 50%)

= 15,000 + 3,750

= 18,750
(Note: this is equivalent units of production for materials, not conversion costs)

However, since materials are added 80% at the beginning and 20% at the end, we need to adjust for that:

Equivalent units of production for materials = (15,000 x 0.8) + (3,750 x 0.2)

= 12,000 + 750

= 12,750

Therefore, the answer is D, 21,000 equivalent units.

A Process with 1,200 Units of Beginning Work in Process