A department adds raw materials to a process at the beginning on the process and

Question

A department adds raw materials to a process at the beginning on the process and incurs conversion costs uniformly throughout the process. For the month of January, there were no units in the beginning goods in process inventory. 110,000 units were started into production in January; and there were 30,000 units that were 40% complete in the ending goods in process inventory at the end of January. What were the equivalent units of production for materials for the month of January?
80,000 equivalent units
30,000 equivalent units
44,000 equivalent units
60,000 equivalent units
110,000 equivalent units

Explanation / Answer

Answer is 110,000 units.

The reason is that materials are added 100% in the beginning itself. Since 110,000 units were started the expense on account of material is 100% for those units, which includes the ending goods in progress also. % of completion of ending goods in progress, is irrelevant for material cost.

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