Asked by Maria Anjanette Sarmiento on May 21, 2024
Verified
A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of January there were no units in the beginning work in process inventory; 90000 units were started into production in January; and there were 20000 units that were 40% complete in the ending work in process inventory at the end of January. What were the equivalent units of production for materials for the month of January?
A) 98000 equivalent units.
B) 82000 equivalent units.
C) 70000 equivalent units.
D) 90000 equivalent units.
Equivalent Units
A concept used in cost accounting to express the amount of materials consumed or labor utilised in terms of fully completed units.
Raw Materials
The basic materials from which a product is made, which are processed in a manufacturing operation to complete a finished good.
- Compute and elucidate equivalent units of production in a process costing framework.
Verified Answer
DC
Delano CodnerMay 27, 2024
Final Answer :
D
Explanation :
Since raw materials are added at the beginning of the process, the equivalent units for materials would be the same as the number of units started, which is 90,000 units. The completion percentage of the ending work in process inventory does not affect the calculation for materials when they are added at the beginning.
Learning Objectives
- Compute and elucidate equivalent units of production in a process costing framework.