If a department that applies process costing starts the reporting period with 50,000 physical units that were 25% complete with respect to direct materials and 40% complete with respect to direct labor, it must add 12,500 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them. a. trueb. false

Question

Clark Dixon

Business

20 December, 00:33

If a department that applies process costing starts the reporting period with 50,000 physical units that were 25% complete with respect to direct materials and 40% complete with respect to direct labor, it must add 12,500 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them. a. trueb. false

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Answers (1)

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Azaria Russell · Answer 1

It is false

Explanation:

Total units are 50,000 which are 25% complete with respect to material i. e 12,500 (50,000*25%) and 40% complete with respect to labour i. e 20,000 (50,000*40%). Therefore number of units that must be completed with respect to material are 75% or 37,500 (50,000*75%) and with respect to labour 60% or 30,000 (50,000*60%).