Question

"Mora Company has 2,000 units in beginning work-in-process, 20% complete as to conversion costs; 23,000 units transferred out to finished goods, and $2,000 unites in ending work in process. 33 1/3% is completed as to conversion costs.

The beginning and ending inventory is fully completed as to materials costs. Equivalent units for materials and conversion costs are, respectively:
A. 22,000; 24,000
B. 24,000; 26,000
C. 26,000; 24,000
D. 26,000; 26,000"

Answer 1

The number of equivalent units for materials and conversion costs can be calculated by considering the number of units in beginning and ending work-in-process, units transferred out to finished goods, and the completion percentage as to conversion costs. In this case, the equivalent units for materials costs is 25,000 and the equivalent units for conversion costs is 26,000. The correct answer is option C. 26,000; 24,000.

Step-by-step explanation:

The number of equivalent units for materials and conversion costs can be calculated by taking into account the number of units in beginning and ending work-in-process, units transferred out to finished goods, and the completion percentage as to conversion costs.

For materials costs: Beginning units + Units transferred out = Equivalent units

In this case, the beginning units is 2,000 and the units transferred out is 23,000, so the equivalent units for materials costs would be 2,000 + 23,000 = 25,000.

For conversion costs: Beginning units x percentage complete + Units transferred out x % complete + Ending units x % complete = Equivalent units

Using the given values, the equivalent units for conversion costs would be (2,000 x 20%) + (23,000 x 100%) + (2,000 x 33 1/3%) = 26,000.

Therefore, the correct answer is option C. 26,000; 24,000.