During a period, 39,200 units were completed and 5000 units were in ending WIP Inventory. Ending WIP was 50% 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 of direct materials will include the completed units and the units in ending WIP. For the completed units, all direct materials have been used, so they have 100% completion. Therefore, the direct materials equivalent units for completed units are 39,200 units. For the units in ending WIP, we must calculate the equivalent units by multiplying the ending WIP units by the percentage of completion for direct materials. This gives us: 5,000 units x 50% = 2,500 equivalent units for direct materials. Adding the completed units and the ending WIP units gives us a total of 41,700 equivalent units for direct materials.

During a Period, 39,200 Units Were Completed and 5000 Units