Figure 6-6 Mannassass Company manufactures chairs. The following information was given for the company:
Materials in the ending inventory were 100 percent complete and conversion in the ending inventory was 20 percent complete.
Refer to Figure 6-6. What are the equivalent units for materials and conversion respectively?

Question

Figure 6-6 Mannassass Company manufactures chairs. The following information was given for the company:
 Materials in the ending inventory were 100 percent complete and conversion in the ending inventory was 20 percent complete.
Refer to Figure 6-6. What are the equivalent units for materials and conversion respectively?

Quizplus · Accepted Answer

The equivalent units for materials will be 100% complete units from beginning inventory + units started and completed during the period + (ending inventory units * % completion). 
Therefore, equivalent units for materials = 8,000 + 24,000 + (12,000 * 100%) = 20,000.

The equivalent units for conversion will be units started and completed during the period + (ending inventory units * % completion). 
Therefore, equivalent units for conversion = 24,000 + (12,000 * 20%) = 16,000.

Hence, the best choice is B.

Figure 6-6 Mannassass Company Manufactures Chairs