If a department that applies process costing starts the reporting period with 50,000 physical units that were 25% complete with respect to direct materials and 40% complete with respect to direct labor, it must add 12,500 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them. a. trueb. false

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Business

Demarcus Pineda

21 May, 20:46

If a department that applies process costing starts the reporting period with 50,000 physical units that were 25% complete with respect to direct materials and 40% complete with respect to direct labor, it must add 12,500 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them. a. trueb. false

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Abigail Parrish · Answer 1

It is false

Explanation:

Total units are 50,000 which are 25% complete with respect to material i. e 12,500 (50,000*25%) and 40% complete with respect to labour i. e 20,000 (50,000*40%). Therefore number of units that must be completed with respect to material are 75% or 37,500 (50,000*75%) and with respect to labour 60% or 30,000 (50,000*60%).