During October,Department A of Answer Inc.started 320,000 units of product in a particular manufacturing process.The beginning work in process inventory was 50,000 units,and the ending inventory was 30,000 units.Direct materials are introduced at the start of processing,and beginning and ending inventories are considered to be 50 percent complete with respect to conversion costs.Department A uses the FIFO costing method. The number of equivalent units for conversion costs of Answer was
A)345,000.
B)330,000.
C)360,000.
D)375,000.

Question

Quizplus · Accepted Answer

The equivalent units for direct materials will be 320,000 units (the total amount started) plus 50,000 units (beginning inventory) minus 30,000 units (ending inventory) which is equal to 340,000. Since the beginning and ending inventories are 50% complete with respect to conversion costs, we need to add the equivalent units needed to complete the beginning inventory and subtract the equivalent units completed for the ending inventory.

For the beginning inventory, we need to complete 50% of the 50,000 units which is 25,000 units. For the units started and the ending inventory, we need to complete 100% of the units. Therefore, the equivalent units for conversion costs are:

Units started: 320,000
Beginning inventory: 25,000
Ending inventory: -30,000
Total equivalent units: 315,000

So, the correct choice is B.

During October,Department a of Answer Inc