A Department Adds Raw Materials to a Process at the Beginning

question 125

Multiple Choice

A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process.For the month of January, there were no units in the beginning work in process inventory; 80,000 units were started into production in January; and there were 20,000 units that were 40% complete in the ending work in process inventory at the end of January.What were the equivalent units of production for materials for the month of January?

• A)88,000 equivalent units.
• B)72,000 equivalent units.
• C)60,000 equivalent units.
• D)80,000 equivalent units.

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Definitions:

Split-off Point

The stage in a production process where multiple products are derived from a single process or material, leading to separate further processing.

Joint Production Costs

Costs incurred in the process of producing two or more products simultaneously from the same raw materials or process.

Split-off Point

Refers to the stage in a production process where joint products can be recognized as separate products.

Joint Processing Costs

Costs incurred in a production process that yields multiple products simultaneously, up to the split-off point.