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Corrigan, Inc. overstated the percentage of work completed with respect to conversion cost on the ending work-in-process inventory. What is the effect of this overstatement on conversion-cost equivalent units and physical units manufactured, respectively? a. None, overstated. b. Overstated, overstated. c. None, none. d. Overstated, none. e. Overstated, understated.

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Zviko

Answer:

d. Overstated, none

Explanation:

Concept of equivalent units determines the number of units in terms of completion.

Overstating the percentage of work completed with respect to conversion cost on the ending work-in-process inventory increases the number of equivalent units.

However percentage of completion does not have any effect on physical units manufactured.

Therefore Overstating the percentage of work completed with respect to conversion cost on the ending work-in-process inventory does not have an effect on physical units manufactured

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