Question

At the start of the month, Oak Inc. had 58,000 units of beginning work in process that were 65% complete. Over the course of the month, the firm completed and transferred out 208,900 units, and at the end of the month, it had 59,400 units in ending work in process that were 70% complete. In comparison, Maple Inc. began the month with 61,200 units of beginning work in process that were 60% complete. Over the course of the month, the firm completed and transferred out 210,500 units, and at the end of the month, it had 52,400 units in ending work in process that were 90% complete. Both firms add 40% of materials at the beginning of the process and the remaining 60% when the units are 70% complete. Both firms also add 25% of conversion costs at the beginning of the process and the remaining 75% when the units are 90% complete. According to these figures, Oak has ________ equivalent units of production for materials and ________ equivalent units of production for conversion costs than Maple.a. more ; fewerb. fewer; fewerc. fewer; mored. more; more

Answer 1

According to these figures, Oak has more equivalent units of production for materials and fewer equivalent units of production for conversion costs than Maple.

Explanation:

The equivalent production unit is an indication of a manufacturer's work on the produced units, which are partially finished at the close of the accounting period. In addition the completely loaded units and the partially filled units are entirely fitted out.

The number of partially completed units x percentage of completion = equivalent units of production.

Oak : 58,000 x 65% = 37,700

Equivalent units of production = 37,700

Maple: 61,200 x 60% = 36,600

So, Oak has more equivalent units of production for materials and fewer equivalent units of production for conversion costs than Maple.