Omega Corporation uses process costing to calculate the cost of manufacturing pool systems.Beginning work in process included 30,000 units 60 percent complete.During the month 170,000 units were completed,20,000 units remain in work in process at 80 percent complete.Using the average cost method,the equivalent units are:
A)170,000
B)196,000
C)186,000
D)190,000

Question

Quizplus · Accepted Answer

The equivalent units are calculated by adding together the units completed and the equivalent units in the work in process.

For the units completed: 
170,000 units

For the work in process: 
30,000 units x 60% = 18,000 equivalent units 
20,000 units x 80% = 16,000 equivalent units 
Total equivalent units in work in process = 18,000 + 16,000 = 34,000 equivalent units

Total equivalent units = 170,000 + 34,000 = 186,000 equivalent units

Therefore, the best choice is C) 186,000.

Omega Corporation Uses Process Costing to Calculate the Cost of Manufacturing