Answer:
False
Total equivalent units 89,000 units
Explanation:
<em>Equivalent units are notional whole units which represent incomplete work and are used to apportion cost between work progress and completed work. These units are determined as follows: </em>
Equivalent units = Degree of work done(%) × units of inventory
Item unit Equivalent unit
Opening inventory 10,000 50% × 10,000 5000
Fully worked unit 80,000 100%× 80,000 80,000
Closing inventory 20,000 20% × 20,000 <u>4,000</u>
Total equivalent units <u> 89,000</u>
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<u>Notes:</u>
<em>1. Fully work represent units started and completed in the same period. They exclude the opening inventory.</em>
<em>Fully worked = 90000- 10,000 =80,000.</em>
<em>2. Note also at that the degree of completion</em> for opening inventory is the simply the balance of work remaining to be done.
<em>For example, for materials, 50% of work has been done on the opening inventory in the last period, hence the balance of 50% would be done this period
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