Start the Day Right has 2500 gallons of orange juice in WIP Inventory, with 75% of materials already added. What are equivalent units in ending WIP Inventory for materials if the orange juice is 58% through the process?
A)1450
B)1875
C)0
D)425

Question

Quizplus · Accepted Answer

To calculate equivalent units in ending WIP Inventory for materials, we need to first calculate the total equivalent units in WIP Inventory using the percentage of completion of the process. 
Total equivalent units in WIP Inventory = 2500 x 0.75 x 0.58 = 1087.5
Since we are only looking for the equivalent units for materials, we multiply the above result by the percentage of materials in the orange juice.
Equivalent units in ending WIP Inventory for materials = 1087.5 x 1 = 1087.5
Therefore, the best choice is B, which gives the correct equivalent units for materials.

Start the Day Right Has 2500 Gallons of Orange Juice