During a period, 40,200 units were completed and 3200 units were in ending WIP Inventory. Ending WIP was 95% complete for direct materials and 50% complete for conversion costs. What are the equivalent units for direct materials?

Question

Quizplus · Accepted Answer

The equivalent units for direct materials are calculated by adding the completed units to the equivalent units in ending WIP for direct materials. The completed units are 40,200. For the ending WIP, which is 3,200 units at 95% completion for direct materials, the equivalent units are 3,200 * 0.95 = 3,040. Therefore, the total equivalent units for direct materials are 40,200 (completed units) + 3,040 (equivalent units from ending WIP) = 43,240.

During a Period, 40,200 Units Were Completed and 3200 Units