Norma Company had 10,000 units in work in process at January 1 that were 50 percent complete.During January,25,000 units were completed.At January 31,6,000 units remained in work in process that were 80 percent complete.Using the average cost method,the equivalent units for January were:
A)31,000.
B)29,800.
C)35,000.
D)36,000.

Question

Quizplus · Accepted Answer

To calculate equivalent units, we need to take into account both the units completed and the units still in process. For the units that were 50% complete at the beginning of January, we need to calculate the equivalent units of the work done in January. For the units that were 80% complete at the end of January, we can simply take those as equivalent units.

Units started in WIP at Jan 1: 10,000 x 50% = 5,000 equivalent units
Units completed in January: 25,000 units 
Units remaining in WIP at Jan 31: 6,000 x 80% = 4,800 equivalent units

Total equivalent units = 5,000 + 25,000 + 4,800 = 29,800 equivalent units.

Therefore, the answer is B.

Norma Company Had 10,000 Units in Work in Process at January