A firm had 600 units in its work in process inventory at the beginning of a month. Of these units, 30 percent were complete with respect to labor, materials, and overhead. The firm transferred 5,000 units to the finished goods inventory during the month. It had 500 units of which 40 percent were complete and still in process at the end of the month. Equivalent production for the month was

Question

Quizplus · Accepted Answer

Equivalent production can be calculated by adding the number of units completed during the month to the percentage of units that are partially complete, multiplied by the total number of units.

Completed units at the beginning of the month = 600 x 0.3 = 180 
Completed units during the month = 5,000 
Partially completed units at the end of the month = 500 x 0.4 = 200

Equivalent production = 180 + 5,000 + 200 = 5,380 units

Therefore, the correct answer is option C.

A Firm Had 600 Units in Its Work in Process