Garrison Company adds direct materials at the beginning of the process and adds conversion costs throughout the process. The data listed below represents data in the Shaping Department: What are the equivalent units for direct materials?
A)61,000
B)53,000
C)57,000
D)50,500

Question

Garrison Company adds direct materials at the beginning of the process and adds conversion costs throughout the process. The data listed below represents data in the Shaping Department:  What are the equivalent units for direct materials?
A)61,000 
B)53,000 
C)57,000 
D)50,500

Quizplus · Accepted Answer

The equivalent units for direct materials are calculated using the units completed during the period plus the equivalent units in ending work in process inventory, multiplied by the percentage of direct materials in each unit. From the data given, we can calculate the equivalent units for direct materials as:
Units completed during the period: 50,000
Ending work in process inventory: 14,000 x 40% = 5,600
Total equivalent units for direct materials: 50,000 + 5,600 = 55,600
Therefore, the best answer choice is C, which is closest to the calculated equivalent units of 55,600.

Garrison Company Adds Direct Materials at the Beginning of the Process