Hahn Company makes fabric-covered storage totes.The company began July with 600 totes in process that were 100 percent complete as to cardboard,75 percent complete as to cloth,and 65 percent complete as to conversion costs.During the month,3,600 totes were started.On April 30,450 totes were in process (100 percent complete as to cardboard,60 percent complete as to cloth,and 50 percent complete as to conversion costs).Using the FIFO method,what are equivalent units for cloth?

Question

Quizplus · Accepted Answer

The equivalent units for cloth using the FIFO method are calculated by considering the work needed to complete the beginning inventory, the work done on units started and completed during the period, and the work done on the ending inventory. The calculation is: (600 totes * 25% remaining work) + (3,600 totes started - 450 totes in ending inventory) + (450 totes * 60% work done) = 150 + 3,150 + 270 = 3,570 equivalent units for cloth.

Hahn Company Makes Fabric-Covered Storage Totes