Question

Sleepy chairs company manufacturers a standard recliner. During October, the firm's Assembly Department started production of 85,000 chairs. During the month, the firm completed 95,000 chairs, and transferred them to the Finishing Department. The firm ended the month with 10,000 chairs in ending inventory. There were 20,000 chairs in beginning inventory. The number of chairs started and completed in October is 75,000 chairs.

True

False

Answer 1

Answer = TRUE

• To check if the statement is TRUE or false, we have to check that if ‘the units to account for’ is equal to the ‘units accounted for’.
• Lets prepare a ‘Unit Reconciliation’ schedule based on data provided.

Units Reconciliation
Units to account for:
Beginning WIP	20,000
Units started this period	85,000
Total Units to account for	105,000
Total Units accounted for:
Completed & Transferred out	95,000
Ending WIP	10,000
Total Units accounted for	105,000

• As you can see, Units to account for = Units accounted for = 105,000 units.
• NOTE that Units Transferred out = 95,000 units
• Beginning units were 20,000.
• Hence, out of 95,000 units transferred out, 20,000 must have been from Beginning units of WIP, the remaining units were STARTED and COMPLETED.
• Units started and completed = 95000 units (total completed and transferred) – 20,000 units (transferred from beginning units) = 75,000 units
• Hence, the answer is TRUE. Units started and completed = 75,000 units.