Gatlin Manufacturing adds direct materials at the beginning of the production process, while conversion costs are incurred uniformly throughout the process. At the end of the period, equivalent units for direct materials were 250 more than equivalent units for conversion costs. 1,000 units were started during the period, and 1,000 units were also completed. Ending Work in Process Inventory was 50% complete. How many physical units were in ending Work in Process Inventory?

Question

Business

Lena

18 January, 03:19

Gatlin Manufacturing adds direct materials at the beginning of the production process, while conversion costs are incurred uniformly throughout the process. At the end of the period, equivalent units for direct materials were 250 more than equivalent units for conversion costs. 1,000 units were started during the period, and 1,000 units were also completed. Ending Work in Process Inventory was 50% complete. How many physical units were in ending Work in Process Inventory?

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Pinky · Answer 1

the physical units on ending inventory will be 500

Explanation:

we have to count for physical units

we know:

that because materials are added at the beginning the physical count is the same as equivalent for materials

also a given is: materials are 250 more than conversion cost

lastly, we know that conversion is at 50% so:

equivalent conversion = (physical x 50%) equivalent materials = physical equivalent materials = equivalent conversion + 250

we can then construct a formula:

physical = physical x 50% + 250

0.5 p = 250

p = 250 / 0.5 = 500

the physical units on ending inventory will be 500