Answer:
Total equivalent units 157,000
Explanation:
Item Units Workings EU Notes
Opening inventory 30,000 70%×30,000 2,100 1
Fully worked 7 120,000 100%×120,000 120,000 2
Closing WIP 20,000. 80%×20, 000 16,000 3
Total equivalent units 157,000
Notes
1. The degree of completion for opening inventory is 70% i. e 100%-30%. Remember that 30% work has been done in the previous period, so the balance is to be done in this current period
2. Fully work represent the units of inventory introduced in the current period and completed in the same period. Meaning 100% work was achieved in the period.
3. Closing work is only 80% completed. This represent work started this period but not yet completed.
Equivalent units for the month of October is 157,000 units i.e (2,100+120,000+16,000)
