The equivalent units in beginning work in process inventory plus the equivalent units in ending work in process inventory equals the units transferred out plus the equivalent units for the work done during the period. True or false?

Question

Business

Jessie Mcclain

18 May, 06:10

The equivalent units in beginning work in process inventory plus the equivalent units in ending work in process inventory equals the units transferred out plus the equivalent units for the work done during the period. True or false?

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Carolina · Answer 1

False

Explanation:

The formula for equivalent units units as follows:

Opening Work in Process + Equivalent units on which the work is done - Closing Work in process = Units Transferred

Therefore, ideally,

Opening work in process - Closing work in process = Units transferred - Equivalent units on which work is done.

As adding all the cost incurred during the period to opening inventory of work in process, we get the total cost for the period, thereafter, deducting the cost allocated to closing work in process we get the value of goods produced and transferred.

Therefore, above statement is false.