Question

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; 80,000 units were started into production in January; and there were 20,000 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? Question 5 options: 88,000 equivalent units 72,000 equivalent units 60,000 equivalent units 80,000 equivalent units

Answer 1

Answer: Option (4) is correct.

Explanation:

No units in the beginning work in process inventory, so materials are added its full value means 100 percent in the beginning. Since, materials with 80,000 units were started the expense, it also includes ending work in process inventory. It is irrelevant for material cost to takes into account the percentage of completion of ending goods.

Therefore,  80,000 equivalent units of production for materials for the month of January.