The Finishing Department had 5,000 incomplete units in its beginning Work-in-Process Inventory which were 100% complete as to materials and 30% complete as to conversion costs. 15,000 units were received from the previous department. The ending Work-in-Process Inventory consisted of 2,000 units which were 50% complete as to materials and 30% complete as to conversion costs. The Finishing Department uses first-in, first-out (FIFO) process costing.
-
What are the equivalent units of production for materials during the period?
A) 12,000.
B) 13,000.
C) 14,000.
D) 15,000.

Question

Quizplus · Accepted Answer

Under FIFO, equivalent units for materials are calculated as units started and completed during the period plus the equivalent units in ending inventory. Here, 15,000 units were started, 5,000 were already in process, so 10,000 units were started and completed. The ending inventory of 2,000 units is 50% complete for materials, adding 1,000 equivalent units. Thus, 10,000 + 1,000 = 11,000 equivalent units for materials.

The Finishing Department Had 5,000 Incomplete Units in Its Beginning