If the cost per equivalent unit is 150 how many physical uni

If the cost per equivalent unit is $1.50 how many physical units are there if the total cost is $31,500 and the physical units are 70% complete?

a. 20,000

b. 30,000

c. 40,000

d. None of the above  

Solution

Cost per equivalent unit = $1.50 per unit

Total cost = $31,500

Equivalent unit = Total cost / Cost per equivelent unit = $31,500 / $ 1.50

= 21,000 Unit (equivalent to 70% completed)

Hence

70 % Complete unit = 21,000 Unit

Total physical unit = 21,000 Unit / 70 x 100 = 30,000 Unit

Total physical unit = 30,000 Unit  

Hence option (b) will be right ansawer i.e. 30,000 Unit