Majesco,which uses a process-costing system,adds material at the beginning of production and incurs conversion cost evenly throughout manufacturing.The following selected information was taken from the company's accounting records:
Total equivalent units of materials: 5,000
Total equivalent units of conversion: 4,400
Units started and completed during the period: 3,500
On the basis of this information,the ending work-in-process inventory's stage of completion is:
A)40%.
B)60%.
C)70%.
D)80%.
E)some other percentage not listed abovE.

Question

Quizplus · Accepted Answer

The ending work-in-process inventory's stage of completion for conversion costs is calculated as follows: Total equivalent units of conversion (4,400) minus units started and completed (3,500) equals 900 equivalent units. Since there are 500 units in ending inventory (5,000 total materials units - 3,500 completed units), the stage of completion is 900/500 = 1.8 or 80%.

Majesco,which Uses a Process-Costing System,adds Material at the Beginning of Production