In applying the first-in, first-out method of costing inventories, if 8,000 units which were 30% completed are in process at June 1, 28,000 units were completed during June, and 4,000 units were 80% completed at June 30, the number of equivalent units of production for June was 28,600.

Question

Quizplus · Accepted Answer

The calculation of equivalent units of production under the first-in, first-out (FIFO) method only considers the work done during the current period. Therefore, the 8,000 units that were 30% completed at the beginning of June are not included in the calculation for June's equivalent units. Instead, the calculation should focus on the completion of the remaining 70% of the beginning inventory, the units completed and transferred out during the month, and the work done on the ending inventory. The provided statement does not accurately reflect the FIFO method's approach to calculating equivalent units.

In Applying the First-In, First-Out Method of Costing Inventories, If