Figure 6-6 Pelosi Company manufactures chairs.The following information was given for the company:
Units, beginning work in process 0
Units started 20,000
Units completed ?
Units, ending work in process 5,000
Cost of direct materials $440,000
Cost of conversion $ 64,000
Materials in the ending inventory were 100 percent complete and conversion in the ending inventory was 20 percent complete.
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Refer to Figure 6-6.What are the equivalent units for materials and conversion respectively?

Question

Quizplus · Accepted Answer

Equivalent units for materials:
Units completed = 20,000 - 5,000 = 15,000
Equivalent units = Units completed + (Ending WIP * % complete)
Equivalent units = 15,000 + (5,000 * 100%) = 20,000

Equivalent units for conversion:
Units completed = 20,000 - 5,000 = 15,000
Equivalent units = Units completed + (Ending WIP * % complete)
Equivalent units = 15,000 + (5,000 * 20%) = 16,000
Therefore, the equivalent units for materials and conversion respectively are 20,000 and 16,000. The best choice is C.

Figure 6-6 Pelosi Company Manufactures Chairs