Bosco Corp.uses a process costing system.Beginning inventory for January consisted of 1,500 units that were 50% completed.During January,10,000 units were completed.On January 31,the inventory consisted of 750 units that were 75% completed.How many units were started during January?
A)8,500
B)9,250
C)10,000
D)10,750

Question

Quizplus · Accepted Answer

To calculate the number of units started during January, we need to use the following formula:
Units started = Units completed - Ending inventory + Beginning inventory
We are given that beginning inventory was 1,500 units that were 50% completed. This means that the equivalent of 750 units (1,500 x 0.5 = 750) had already been completed for these units. So, the total equivalent completed units that were available at the beginning of January were 1,500 + 750 = 2,250.
We are also given that 10,000 units were completed during January. Therefore, the total equivalent completed units available during January were 2,250 + 10,000 = 12,250.
On January 31, the inventory consisted of 750 units that were 75% completed. This means that the equivalent of 562.5 units (750 x 0.75 = 562.5) had already been completed for these units. Therefore, the ending inventory equivalent completed units were 12,250 - 562.5 = 11,687.5.
Finally, we can solve for the units started:
Units started = 10,000 - 11,687.5 + 1,500 = 9,250. Therefore, the answer is B) 9,250.