Quench Inc mass produces various beverage products and uses a process costing sy

Question

Quench Inc mass produces various beverage products and uses a process costing system. The total equivalent units of production for its bottling department during the year equals: The number of units completed and transferred out to the next process The number of equivalent units transferred in from the previous process, plus the number of equivalent units in ending work in process inventory The number of units completed and transferred out to the next process, plus the number of equivalent units in ending work in process inventory The number of equivalent units in beginning work in process inventory, plus the number of units completed and transferred out to the next process None of the above.

Explanation / Answer

Equivalent units or units lying in ending inventory and converted using their degree of completion. While calculating total equivalent units transferred out are considered as they are complete and sent out.

Hence, correct option is “The number of units completed and transferred out to the next process, plus the number of equivalent units in ending work in process inventory”

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