Quality Seating Inc. has completed its monthly inventory count for office chairs and recorded the following information for ending inventory: 400 units 100 percent complete, 500 units 70 percent complete, and 200 units 40 percent complete. The company uses a process costing system to determine unit cost. Why would unit cost be inaccurate if 1,100 units were used to determine unit cost?

Requirement:

1. Compute the equivalent units of production for Quality Seating Inc.
2. Explain why using 1,100 units to determine unit cost would be misleading.