If a department that uses process costing starts the reporting period with 100,000 physical units that were 20% complete with respect to direct labor, the equivalent units of direct labor in Work in Process are 20,000true/false

Question

Honey Pie

Business

3 September, 00:36

If a department that uses process costing starts the reporting period with 100,000 physical units that were 20% complete with respect to direct labor, the equivalent units of direct labor in Work in Process are 20,000true/false

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Dane Matthews · Answer 1

true

Explanation:

The equivalent units of production in respect of direct labor for the given scenario shall be determined through the following mentioned equation:

Equivalent units of direct labor=Number of physical units at start of the reporting period*Completion percentage with respect to direct labor

Equivalent units of direct labor=100,000*20%

=20,000 units

So based on the above calculation, the statement is true