A firm had 600 units in its work in process inventory at the beginning of a month.Of these units,30 percent were complete with respect to labor,materials,and overhead.The firm transferred 5,000 units to the finished goods inventory during the month.It had 500 units of which 40 percent were complete and still in process at the end of the month.Equivalent production for the month was

Question

Quizplus · Accepted Answer

To calculate the equivalent production, we need to consider both the units completed during the month and the proportion of units still in process.

Units completed during the month = 30% of 600 (work in process at the beginning) + 5,000 (transferred to finished goods inventory) = 1,980 units

Units still in process at the end of the month = 40% of 500 (work in process at the end) = 200 units

Total equivalent production = units completed + units still in process = 1,980 + 200 = 2,180 units

Therefore, the equivalent production for the month is 5,000 + 2,180 = 5,180 units.

A Firm Had 600 Units in Its Work in Process