During a period,40,000 units were completed and 3,500 units were in ending WIP inventory.Ending WIP was 80% complete for direct materials and 30% complete for conversion costs.What are the equivalent units for direct materials?

Question

Quizplus · Accepted Answer

To calculate the equivalent units for direct materials, we need to add the completed units to the ending WIP inventory units that are partially completed.

So, the total equivalent units for direct materials would be:

Direct materials used in completed units + ([Direct materials in ending WIP inventory] x % completion)

Direct materials used in completed units = 40,000 units

Direct materials in ending WIP inventory = 3,500 units x 80% = 2,800 units

Total equivalent units for direct materials = 40,000 + (2,800 x 80%) = 42,800 units

Therefore, the correct choice is D.

During a Period,40,000 Units Were Completed and 3,500 Units Were