What are the ending inventory equivalent units for materials if 15,600 units are completed and transferred out and 4,800 remain in ending WIP at 35% complete?

Question

Niko Sims

Business

24 November, 14:55

What are the ending inventory equivalent units for materials if 15,600 units are completed and transferred out and 4,800 remain in ending WIP at 35% complete?

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Answers (1)

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Giuliana Giles · Answer 1

The equivalent units of ending inventory is 17,280 units as it is calculated and explained below.

Explanation:

It is very clear that the 15,600 units were completed 100%, while the remaining 4,800 units left in the process were 35% complete, on that basis, equivalent units of ending inventory refers the addition of the completed units transferred out and the equivalent completed proportion of the items not yet completed.

From the foregoing, the equivalent units of ending inventory is calculated thus:

Completed units 15600*100% 15,600 units

Uncompleted units 4800*35% 1,680 units

Equivalent units 17,280 units

Besides, with the equivalent units known, actual cost per unit of completed can now be computed easily.