HTC Calculators uses process costing. At the beginning June, there were 1,100 units in process, 70% complete with respect to material and 60% complete with respect to conversion costs. During June, 24,000 units were started and 23,600 units were completed. The units in ending Work in Process inventory were 90% complete with respect to material and 30% complete with respect to conversion costs. How many equivalent units will be used in calculating the cost per unit for materials?

Question

Quizplus · Accepted Answer

The equivalent units for materials are calculated by adding the units completed and transferred out (23,600) to the equivalent units in ending inventory (400 units * 90% = 360). Therefore, 23,600 + 360 = 23,960. However, since the beginning inventory was 70% complete, we need to add the remaining 30% of the beginning inventory (1,100 units * 30% = 330). Thus, 23,960 + 330 = 24,290. The closest option is 24,950.

HTC Calculators Uses Process Costing