Answer:
The equivalent units for direct materials are 43,240.
Explanation:
Given:
During a period, 40,200 units were completed and 3,200 units were in ending WIP Inventory. Ending WIP was 95% complete for direct materials.
Now, to find the equivalent units for direct materials.
Complete units = 40,200.
Ending WIP (work in progress) Inventory = 3,200.
As, ending WIP was 95% complete for direct materials.
Thus, ending WIP Inventory = 95% of 3,200.
= [tex]\frac{95}{100} \times 3,200[/tex]
[tex]=0.95\times 3,200[/tex]
[tex]=\$3,040.[/tex]
Now, to get the equivalent units for direct materials by adding complete units and ending WIP Inventory:
[tex]Complete\ units\ +\ ending\ WIP\ Inventory[/tex]
[tex]=40,200+3,040[/tex]
[tex]=43,240.[/tex]
Therefore, the equivalent units for direct materials are 43,240.
