Final answer:
To calculate the equivalent units of materials, add the units completed during the month to the units in process at the end of the month, assuming all are 100% complete with respect to materials, which yields 86,000 equivalent units. The correct option is b.
Step-by-step explanation:
The question is asking for the equivalent units of materials for the Molding Department in January. To find this, we must account for the units in process at the beginning of the month, the units completed during the month, and the units still in process at the end of the month.
At the beginning of January, there were 4,000 dolls in process which were 100% complete with respect to materials. During January, 79,000 dolls were completed. On January 31, there were 7,000 dolls in work in process, and these were also 100% complete with respect to materials. To calculate the equivalent units for materials, we simply add the dolls completed with those in process since they are all fully complete in terms of materials, regardless of the conversion costs.
The equivalent units of materials for January is:
79,000 (completed) + 7,000 (ending work in process) = 86,000