Browning, which uses a process-costing system, adds all material at the beginnin

Question

Browning, which uses a process-costing system, adds all material at the beginning of production and incurs conversion cost evenly throughout manufacturing. The information that follows relates to the period just ended: Units started and completed: 60,000 Units in ending work-in-process inventory: 20,000, 80% complete Which of the following choices correctly expresses the total equivalent units of production with respect to material and conversion cost? 60,000 for materials and 60,000 for conversion. 76,000 for materials and 76,000 for conversion. 80,000 for materials and 76,000 for conversion. 80,000 for materials and 64,000 for conversion. 80,000 for materials and 80,000 for conversion.

Explanation / Answer

Equivalent Materials = Units Started and Completed + Ending Units * 100% Completion

Materials will be always 100% completed unless other wise specified

Equivalent Materials = 60000 + 20000 * 100% Completion

Equivalent Materials = 80000 Units

Equivalent Conversion = Units Started and Completed + Ending Units * 80% Completion

Equivalent Conversion = 60000 + 20000 * 80% Completion

Equivalent Conversion = 76000 Units

80,000 for materials and 76,000 for conversion is the correct answer

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