Question

Stock Company has 2,000 units in beginning work in process inventory, 20% complete as to conversion costs, 23,000 units transferred out to finished goods, and 3,000 units in ending work in process 33 1/3% complete as to conversion costs. The beginning and ending inventory is fully complete as to materials costs.

Equivalent units for materials and conversion units are:

A. 26,000, 26,000.

B. 26,000, 24,000.

C. 22,000, 24,000.

D. 24,000, 26,000.

Answer 1

B. 26,000, 24,000.

Step-by-step explanation:

Stock Company

Equivalent units

Particulars Units % of Completion Equivalent Units

Mat. Conversion Mat. Conversion

Transferred Out 23000 100 100 23000 23000

Ending WIP 3000 100 331/3% 3000 999.9= 1000

Total Equivalent units 26000 24000

The Equivalent units can be calculated either by adding the units transferred out and ending WIP or by adding beginning WIP and units started.

Equivalent units for materials 26000

and Equivalent units for conversion are: 24000