Use the following information for the next 2 questions.
Assume there were 6,000 units in beginning work in process, 60% complete. 20,000 units were completed during the month. Ending work in process is 40% complete, which is equivalent to 3,200 units for conversion costs. Materials are added at the beginning of the process. The FIFO method is used.
-The number of units started this month is
A) 20,000 units
B) 22,000 units
C) 28,000 units
D) 15,280 units

Question

Quizplus · Accepted Answer

The number of units started this month is calculated by adding the units completed and the ending work in process, then subtracting the beginning work in process: 20,000 (completed) + 3,200 (ending WIP) - 6,000 (beginning WIP) = 17,200 units started. However, since the ending WIP is 40% complete, the equivalent units for conversion costs are 3,200, meaning the actual units in ending WIP are 3,200 / 0.4 = 8,000. Therefore, 20,000 (completed) + 8,000 (actual ending WIP) - 6,000 (beginning WIP) = 22,000 units started.

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