The equivalent units of production for labour and overhead for the month are?
A) 70,000 units.
B) 80,000 units.
C) 82,500 units.
D) 90,000 units.

Question

Quizplus · Accepted Answer

The equivalent units of production for labour are calculated as follows: 
Units completed and transferred out + (ending work in process inventory x degree of completion) - (beginning work in process inventory x degree of completion) = 55,000 + (7,500 x 100%) - (10,000 x 100%) = 62,500 units.
The equivalent units of production for overhead are calculated the same way: 
Units completed and transferred out + (ending work in process inventory x degree of completion) - (beginning work in process inventory x degree of completion) = 55,000 + (7,500 x 100%) - (10,000 x 100%) = 62,500 units.

Therefore, the total equivalent units of production for the month are 62,500 + 20,000 = 82,500 units. Thus, the correct answer is option C (82,500 units).

The Equivalent Units of Production for Labour and Overhead for the Month