Question

Lewisburg Corporation had 12,000 units of beginning inventory in its Forming Department on July 1. The units were 100 percent complete with respect to direct materials requirements but only 40 percent complete with respect to conversion requirements. On July 31, the company had 9,000 units of inventory remaining in its Forming Department. These units were 100 percent complete with respect to their direct materials requirements but only 70 percent complete with respect to conversion. The Forming Department’s direct materials cost for July totaled $500,000, or $25 per equivalent unit consumed. Its conversion costs for July totaled $352,000, or $16 per equivalent unit. Determine how many units were started and completed in the Forming Department during July.

Answer 1

Answer:

the total number of units started and completed = 11,000 units

Explanation:

total materials costs incurred during the month = $500,000

if materials are added at the beginning of the process, beginning WIP already had 100% of materials costs added, therefore, materials costs were applied only to the total number of units started

total number of units started = $500,000 / $25 cost per EUP = 20,000 units

the total number of units started and completed = units started - ending WIP = 20,000 - 9,000 = 11,000 units

total number of units completed = beginning WIP + units started - ending WIP = 12,000 + 20,000 - 9,000 = 23,000 units