Question

Ohio, Inc., which uses a process-cost accounting system, began operations on January 1 of the current year. The company incurs conversion cost evenly throughout manufacturing. If Ohio started work on 3,000 units during the period and these units were 70% of the way through manufacturing, it would be correct to say that the company has:

a. 900 equivalent units of production.

b. 900 in-process units.

c. 2,100 completed units.

d. 3,000 physical units in production.

e. 3,000 equivalent units of production.

Answer 1

c. 2,100 completed units.

Step-by-step explanation:

To calculate equivalent units we simply compute the completed percentage, in this case 70%, and multiply that with the total processed units in that particular period, which are in this case 3000 units.

Equivalent units = % completed * total processed units

Equivalent units = 0.7 * 3000 = 2100 completed equivalent units.

(3000 part completed units are equal to 2100 completed units)

Hope that helps.