Chen Company manufactures keyboards in a two-department process, Assembly and Finishing. Information on the first department, Assembly, follows:
There was no beginning inventory, and of the 200,000 units started in production 168,000 were completed and transferred to the Finishing department, while 32,000 units were still in process. These units had all materials added but were only 75 percent complete as far as conversion costs.
-The equivalent units for materials are
A) 168,000.
B) 200,000.
C) 192,000.
D) 32,000.

Question

Chen Company manufactures keyboards in a two-department process, Assembly and Finishing. Information on the first department, Assembly, follows:
  There was no beginning inventory, and of the 200,000 units started in production 168,000 were completed and transferred to the Finishing department, while 32,000 units were still in process. These units had all materials added but were only 75 percent complete as far as conversion costs.
-The equivalent units for materials are
A) 168,000. 
B) 200,000. 
C) 192,000. 
D) 32,000.

Quizplus · Accepted Answer

The equivalent units for materials are calculated based on the total units started and completed, plus the units in ending inventory adjusted for their percentage of completion. The correct calculation leads to 200,000 equivalent units.

Chen Company Manufactures Keyboards in a Two-Department Process, Assembly and Finishing