COST ACCOUNTING
PROCESS COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Hanker Company had the following department data on physical units:Work in process, beginning 3, 000Completed and transferred out 18, 000Work in process, ending 2, 400Materials are added at the beginning of the process. What is the total number of equivalent units for materials during the period?
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18, 600.
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2, 400.
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20, 400.
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15, 000.
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Explanation:
Detailed explanation-1: -If the units in the beginning Work-in-Process Inventory are greater than the units in the ending Work-in-Process Inventory, then the units transferred out are: more than the units started during the period.
Detailed explanation-2: -The equivalent units of production is the sum of units completed and transferred out and the equivalent units of ending work in process inventory (5, 000 units X 60%) or 20, 000 + 3, 000 = 23, 000 units. Equivalent units of production measure the amount of work that should be completed during a period.
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