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 standard cost 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

To find the number of units started this month, we need to use the following formula:

Units started = Units completed + Ending WIP - Beginning WIP

Units completed = 20,000 units

Ending WIP = 3,200 units at 40% complete, which means it is equivalent to 3,200/0.4 = 8,000 units in total.

Beginning WIP = 6,000 units at 60% complete, which means it is equivalent to 6,000/0.6 = 10,000 units in total.

Using the formula above, we get:

Units started = 20,000 + 8,000 - 10,000
Units started = 18,000

Therefore, the best answer is B) 22,000 units, which is closest to 18,000 units.

Assume There Were 6,000 Units in Beginning Work in Process