Department X of a manufacturing company works on only one product,and all costs are incurred uniformly as the product goes along the assembly line.The 8,000 units in process on December 1 were 60% completed.An additional 40,000 units were placed in production during December.At December 31,the 10,000 units in process were 60% completed.The equivalent units of production during December amounted to:
A)49,200.
B)60,800.
C)57,200.
D)58,800.

Question

Quizplus · Accepted Answer

The equivalent units of production for December are calculated by adding the completed units to the equivalent units for the work in process at the end of the period. The completed units are the 40,000 units started and completed during the month (since the beginning work in process will be completed and an additional 30,000 units will be finished to have 10,000 units still in process at the end). The equivalent units for the ending work in process are 10,000 units * 60% = 6,000 units. The beginning work in process was 8,000 units * 60% = 4,800 units, which had already been accounted for in the previous period's calculation and thus only the additional work done on these units in the current period is considered. Therefore, the total equivalent units of production for December are 40,000 (completed units) + 6,000 (from the ending work in process) = 46,000. However, this calculation does not account for the correct treatment of the beginning work in process and its completion during the period. The correct approach is to consider the full completion of the beginning inventory and the work done on the ending inventory. Thus, the correct calculation should include the units completed during the month plus the work done on the ending inventory, leading to the correct answer through the proper formula for calculating equivalent units of production in a process costing system.

Department X of a Manufacturing Company Works on Only One