In: Accounting
The following information pertains to a company’s Finishing Department operations in May.
Units |
% Completion |
|
Work-in-process, May 1 |
2,000 |
40% |
Units started during May |
10,000 |
|
Units completed and transferred to FG |
8,000 |
|
Work-in-process, May 31 |
? |
25% |
Materials are added at the end of the process, and conversion costs are incurred evenly throughout the process. The equivalent units of materials added during May were
A.8,000
B.8,200
C.9,100
D.10,000
Answer: A. 8,000
Calculations:
Work in process, May 1 | 2,000 |
Units started during May | 10,000 |
Total units to be accounted for | 12,000 |
Less: Units completed and transferred to FG | -8,000 |
Work in process, May 31 | 4,000 |
Materials | |
Units completed and transferred out to FG: | |
Work in process May 1 [2,000 x 100%] | 2,000 |
Units started and completed during May [(8,000 - 2,000) x 100%] | 6,000 |
Work in process, May 31 [4,000 x 0%] | 0 |
Equivalent units of materials | 8,000 |
*Given that Materials added at the end. So, Beginning materials were 100 % completed and Ending materials were 0% completed.
Thus, Option A is correct and remaining options are incorrect.