The following unit data were assembled for the heating process of Morgan Processing,Inc.,for the month of August.Direct materials are added at the beginning of the process.Conversion costs are added uniformly over the production process.The company uses the FIFO process costing method. $\begin{array}{llr}
&\text { Units }\
\text { Beginning work in process inventory } &\
\text { (30 percent complete)} &5,000\
\text { Units started in August } &44,000\
\text { Ending work in process } &\
\text {(60 percent complete) } &4,500\
\end{array}$

The number of equivalent units produced with respect to direct materials costs is

Question

The following unit data were assembled for the heating process of Morgan Processing,Inc.,for the month of August.Direct materials are added at the beginning of the process.Conversion costs are added uniformly over the production process.The company uses the FIFO process costing method. $\begin{array}{llr}
&\text { Units }\
\text { Beginning work in process inventory } &\
 \text {  (30 percent complete)} &5,000\
 \text { Units started in August } &44,000\
 \text { Ending work in process } &\
 \text {(60 percent complete)  } &4,500\
\end{array}$

The number of equivalent units produced with respect to direct materials costs is

Quizplus · Accepted Answer

To determine the equivalent units for direct materials, we add the number of units completed during the month to the equivalent units in ending work-in-process.

Units completed: 
20,000 units in beginning WIP + 40,000 units started and completed during the month = 60,000 units completed

Equivalent units in ending WIP: 
100% complete for materials for 4,000 units in the ending WIP = 4,000 equivalent units

Total equivalent units: 
60,000 units completed + 4,000 equivalent units in ending WIP = 64,000 equivalent units

Therefore, the answer is B) 44,000.

The Following Unit Data Were Assembled for the Heating Process