Question

Mortensen Industries, which uses a process-costing system, adds material at the beginning of production and incurs conversion cost evenly throughout manufacturing. The following selected information was taken from the company's accounting records:
Total equivalent units of materials: 5,000
Total equivalent units of conversion: 4,400
Units started and completed during the period: 3,500
On the basis of this information, the ending work-in-process inventory's stage of completion is:_____.
a. 80%.b. 70%.c. 60%.d. 40%.

Answer 1

Answer:

c. 60%.

Explanation:

Calculation for what the ending work-in-process inventory's stage of completion is:

First step is to calculate the Ending WIP

Ending WIP = 5,000 - 3,500

Ending WIP = 1,500 units

Now let calculate the ending work-in-process inventory's stage of completion using this formula

Ending work-in-process inventory's stage of completio

4,400 = 3,500 + (x% * 1,500)

4,400 = 3,500 + 15x

15x = 4,400 - 3,500

15x = 900

x = 900/15

x = 60%

Therefore the ending work-in-process inventory's stage of completion is:60%