Assume a company's beginning work in process consists of 20,000 units, 40% complete. Materials are added at the beginning of the process. During the month, 90,000 units are transferred in. The ending work in process consists of 10,000 units, 50% complete. Under the standard cost method, the equivalent units of production are: Transferred In Materials Conversion Costs
A)90,000 90,000 97,000
B)110,000 100,000 105,000
C)110,000 92,000 105,000
D)90,000 100,000 105,000

Question

Quizplus · Accepted Answer

Equivalent units of production = Beginning work in process + Units transferred in - Ending work in processMaterials are added at the beginning of the process, so the equivalent units of production for materials is equal to the total units transferred in, which is 90,000 units.Conversion costs are added evenly throughout the process, so the equivalent units of production for conversion costs is equal to the total units transferred in plus the equivalent units of production for the beginning work in process, which is 90,000 units + (20,000 units x 40%) = 98,000 units.Therefore, the equivalent units of production are:Transferred In Materials Conversion Costs90,000 98,000

Assume a Company's Beginning Work in Process Consists of 20,000