The Blue Tide Company manufactures light bulbs in a single process. The following information is available:
$$\begin{array} { | l | l | }
\hline \text { Work in process inventory, Jan. 1 } & 0 \text { units } \
\hline \text { Units started in production } & 14,000 \text { units } \
\hline \text { Units completed and transferred out } & 9,000 \text { units } \
\hline \text { Work in process inventory, Dec. } 31 & 5,000 \text { units } \
\hline \text { Production costs: } & \
\hline \text { Direct materials } & \$ 38,500 \
\hline \text { Direct labor } & \$ 13,975 \
\hline \text { Manufacturing overhead } & \$ 8,600 \
\hline
\end{array}$$ The ending work in process was 90% complete with respect to direct materials and 40% complete with respect to conversion costs. What were the equivalent units of production for direct materials?

Question

The Blue Tide Company manufactures light bulbs in a single process. The following information is available:
$$\begin{array} { | l | l | } 
\hline \text { Work in process inventory, Jan. 1 } & 0 \text { units } \
\hline \text { Units started in production } & 14,000 \text { units } \
\hline \text { Units completed and transferred out } & 9,000 \text { units } \
\hline \text { Work in process inventory, Dec. } 31 & 5,000 \text { units } \
\hline \text { Production costs: } & \
\hline \text { Direct materials } & \$ 38,500 \
\hline \text { Direct labor } & \$ 13,975 \
\hline \text { Manufacturing overhead } & \$ 8,600 \
\hline
\end{array}$$ The ending work in process was 90% complete with respect to direct materials and 40% complete with respect to conversion costs. What were the equivalent units of production for direct materials?

Quizplus · Accepted Answer

Equivalent units of production for direct materials are calculated by adding the units completed and transferred out to the equivalent units in ending work in process inventory. Here, 9,000 units were completed and transferred out. The ending work in process inventory had 5,000 units, which were 90% complete with respect to direct materials. Thus, the equivalent units for direct materials are $9,000 + (5,000 \times 0.9) = 9,000 + 4,500 = 13,500$ units.

The Blue Tide Company Manufactures Light Bulbs in a Single