Fiero Corporation adds all materials at the beginning of production and incurs conversion cost evenly throughout manufacturing. The company completed 70,000 units during the year and had 12,000 units in process at year end, 20% complete with respect to conversion cost. Equivalent units for the year total:
A) materials, 70,000; conversion, 70,000.
B) materials, 70,000; conversion, 2,400.
C) materials, 72,400; conversion, 72,400.
D) materials, 82,000; conversion, 72,400.
E) materials, 82,000; conversion, 82,000.

Question

Quizplus · Accepted Answer

Since all materials are added at the beginning, equivalent units for materials are 70,000 completed + 12,000 in process = 82,000. For conversion, 70,000 completed + (12,000 * 20%) = 72,400.

Fiero Corporation Adds All Materials at the Beginning of Production