Question

# Department E had 4,000 units in Work in Process that were 40% completed at the beginning...

Department E had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of \$12,500. During the period, 14,000 units of direct materials were added at a cost of \$28,700 and 15,000 units were completed. At the end of the period, 3,000 units were 75% completed. All materials are added at the beginning of the process. Direct labor was \$32,450, and factory overhead was \$18,710. The number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories was

a.14,650

b.15,650

c.14,850

d.14,150

The correct answer is Option C - 14,850

Explanation :-

In the question it was given that Department E had 4,000 units in Work in Process that were 40% completed at the beginning period.

Beginning Inventory = 4,000 units × 40%

Beginning Inventory = 1,600 units

During the period, 15,000 units were completed

Inventory Introduce during the year = Inventory Completed during the year - Beginning Inventory = 15,000 units - 4,000 units

Inventory Introduce during the year = \$11,000

Given, At the end of the period, 3,000 units were 75% completed.

Ending Inventory = 3,000 units × 75%

Ending Inventory = 2,250 units

The number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories was

= Beginning Inventory + Inventory Introduce during the year + Ending Inventory

= 1,600 units + 11,000 units + 2,250 units

= 14,850 units

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