Question

Gamma, Inc., manufactures a specialized spare part for heavy vehicles. At the end of September, Gamma, Inc. had the following data for spare part production. (Output is measured in number of units):

Units, beginning work in process-
Units completed1,500 units
Units, ending work in process (30% complete)800 units. Calculate the equivalent units of output for the month of September.
a.1,740 units
b.1,690 units
c.1,500 units
d.2,300 units

Answer 1

To calculate the equivalent units of output for Gamma, Inc., we add the number of fully completed units to the equivalent units represented by the unfinished work in process at 30% completion.

The total equivalent units of output for September are 1,740 units.

Step-by-step explanation:

The question pertains to the calculation of equivalent units of output for Gamma, Inc. for the month of September based on given production data.

To calculate equivalent units, we start with the number of units completed because they are 100% complete. We then add the percentage of completion for the ending work in process to the units that are still in progress.

To find the equivalent units of output, we perform the following calculation:

• Units completed: 1500 units (100% complete)
• Units ending work in process: 800 units (30% complete)

Therefore, equivalent units for ending work in process = 800 units * 30% = 240 units.

The total equivalent units of output = Units completed + Equivalent units for ending work in process.

Equivalent units of output = 1500 units + 240 units = 1740 units.

The correct answer is option (a) 1,740 units.