Answer:
Option B
Equivalent units =32,000 units
Explanation:
Equivalent units are notional whole units which represent incomplete work and are used to apportion production costs between work in progress and finished work.
The equivalent units of material = degree of completion × units
Equivalent unit of materials
Item Units Workings Equivalent unit
opening inventory 7000 0%× 7000 0
Fully worked 29,500 100% × 29500 29,500
Closing inventory 2,500 100%× 2500 2,500
Total equivalent units of materials 39,000
Notes
1. Degree of completion for opening inventory is 100%-100%= 0%. Remember that materials are added at the beginning; so the material content for the opening inventory has already been completed added in the previous period i.e July
2. Fully work represent the units of inventory introduced in the current period and completed in the same period. Meaning 100% work was achieved in the period. it is equal to the units introduced = 32,000 - 2500 =29500
3. Closing work in progress material content will be is 100% completed. This represent work started this period but not yet completed.
Equivalent units for the month of August for materials = 0 + 29500 + 2500= 32,000 units
Equivalent units =32,00o units
