Ashley Corporation uses a process-cost accounting system. The company adds direct materials and direct labor at the start of its production process; overhead cost is incurred evenly throughout manufacturing. The firm has no beginning work-in-process inventory; its ending work in process is 40% complete. Which of the following sets of percentages would be used to calculate the correct number of equivalent units in the ending work-in-process inventory?
A. Materials, 100%; labor 40%; overhead cost, 40%.
B. Materials, 40%; labor, 40%; overhead cost, 100%.
C. Materials, 40%; labor, 40%; overhead cost, 60%.
D. Materials, 100%; labor, 100%; overhead cost, 40%.
E. Materials, 100%; labor, 100%; overhead cost, 100%.
Answer: D
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