Department A had 4,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period, 29,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. The number of equivalent units of production for material costs for the period was:
A) 33,000
B) 29,800
C) 29,000
D) 32,000

Question

Quizplus · Accepted Answer

Equivalent units of production for material costs can be calculated by adding the total number of units completed during the period (31,000) to the number of units in ending work in process (2,000 units x 80% completion = 1,600 equivalent units), which gives a total of 32,600 equivalent units. Then, subtract the number of units in beginning work in process (4,000 units x 60% completion = 2,400 equivalent units) to get the equivalent units of production for the period: 32,600 - 2,400 = 30,200 equivalent units. However, since all materials are added at the beginning of the process, the equivalent units of production for material costs will be equal to the total units started during the period (4,000 + 29,000 = 33,000) because all of these units will have incurred material costs. Since the question specifically asks for the equivalent units of production for material costs, the correct answer is C) 29,000, which represents the total number of units on which material costs were incurred during the period.

Department a Had 4,000 Units in Work in Process That