If beginning inventory contained 2,000 units of product that were judged to be 40 percent complete as to labour,what would be the equivalent units of production for labour during the current period under the FIFO method for these 2,000 units?
A)400 units
B)800 units
C)1,200 units
D)2,000 units

Question

Quizplus · Accepted Answer

Under the FIFO method, we assume that beginning inventory units are completed first, and then we take into account the current period's units. So, for the 2,000 units in beginning inventory that were 40% complete as to labour, we would calculate the equivalent units of production for labour as:
2,000 units x 40% = 800 equivalent units

Then, we would add the units completed during the current period. Let's say that 1,200 units were started and completed during the period. These units are 100% complete as to labour, so their equivalent units of production for labour are simply 1,200 units x 100% = 1,200 equivalent units.

Finally, we add these two numbers together to get the total equivalent units of production for labour:
800 + 1,200 = 2,000 equivalent units

Therefore, the answer is (C) 1,200 units.

If Beginning Inventory Contained 2,000 Units of Product That Were