Question

LO 5.3There were 1,000 units in ending inventory after transferring 16,000 units to finished goods inventory. If the beginning inventory was 2,000 units, how many units were started in process?

1,000
2,000
15,000
17,000

Answer 1

The number of units started in process is calculated using the inventory flow equation. Given a beginning inventory of 2,000 units, an ending inventory of 1,000 units, and 16,000 units transferred to finished goods, the calculation reveals that 15,000 units were started in process.

Step-by-step explanation:

To determine the number of units started in process in a manufacturing setting, we use a basic inventory flow equation. The formula is as follows: Beginning Inventory + Units Started in Process - Ending Inventory = Units Transferred to Finished Goods. So, we need to find the 'Units Started in Process' for this problem.

Given the following:

• Beginning Inventory = 2,000 units
• Ending Inventory = 1,000 units
• Units Transferred to Finished Goods = 16,000 units

We plug these numbers into the formula:

2,000 units (Beginning Inventory) + Units Started in Process - 1,000 units (Ending Inventory) = 16,000 units (Transferred to Finished Goods).

Then we solve for 'Units Started in Process':

Units Started in Process = 16,000 units + 1,000 units - 2,000 units = 15,000 units

Therefore, the correct answer is 15,000 units were started in process.