Ely Company had the following data for the current year:
$\begin{array}{llr}
\text {Units in process at the begmning of the month } &4,000\
\text { Units in process at the end of the month } &10,000\
\text { Units started during the month} &40,000
\end{array}$

Materials are added at the beginning of the process. Beginning work in process was 40 percent complete as to conversion. Ending work in process was 70 percent complete as to conversion.
-To find the unit cost of materials for a department using the FIFO method of process costing,by what figure would you divide the total cost of materials issued to the department during the year?
A)units in process
B)units started and completed
C)total units manufactured
D)equivalent units of output

Question

Ely Company had the following data for the current year:
$\begin{array}{llr}
  \text {Units in process at the begmning of the month  } &4,000\
 \text { Units in process at the end of the month   } &10,000\
 \text {  Units started during the month} &40,000
\end{array}$

Materials are added at the beginning of the process. Beginning work in process was 40 percent complete as to conversion. Ending work in process was 70 percent complete as to conversion.
-To find the unit cost of materials for a department using the FIFO method of process costing,by what figure would you divide the total cost of materials issued to the department during the year?
A)units in process
B)units started and completed
C)total units manufactured
D)equivalent units of output

Quizplus · Accepted Answer

To find the unit cost of materials using the FIFO method of process costing, you divide the total cost of materials issued to the department by the equivalent units of output for materials. Since materials are added at the beginning of the process, the equivalent units for materials would be the total units started and completed during the period plus the equivalent units in the ending work in process inventory, without needing to adjust for the beginning inventory since materials are added at the beginning.

Ely Company Had the Following Data for the Current Year