During March,the production department of a process operations system completed and transferred to finished goods 25,000 units that were in process at the beginning of March and 110,000 units that were started and completed in March.March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to conversion.At the end of March,30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to conversion.Compute the number of physical units transferred to finished goods.
A)110,000.
B)135,000.
C)105,000.
D)165,000.
E)144,000.

Question

Quizplus · Accepted Answer

The number of units transferred to finished goods can be calculated as:

Units started and completed in March + Beginning inventory units completed in March = Units transferred to finished goods

Units started and completed in March can be directly taken as 110,000.

For the beginning inventory units, we need to first calculate the equivalent units of production for both materials and conversion:

Equivalent units of production for materials = Units in beginning inventory (100% complete) + Units started and completed in March = 25,000 + 110,000 = 135,000

Equivalent units of production for conversion = Units in beginning inventory (55% complete) + Units started and completed in March (100% complete) = (25,000 x 0.55) + 110,000 = 23,750 + 110,000 = 133,750

Therefore, the total equivalent units of production = 135,000 (for materials) + 133,750 (for conversion) = 268,750

The ending inventory units are not relevant for the calculation of units transferred to finished goods.

Substituting the values in the formula:

Units transferred to finished goods = 110,000 + 135,000 = 245,000

Therefore, the answer is B) 135,000.

During March,the Production Department of a Process Operations System Completed