The activity in Nolan Company's Blending Department for the month of April is given below:
$\begin{array} {| l | r | r | }
\hline & \text { Number of Units } & \begin{array} { r }
\text { Labour and overhead } \
\text { percentage complete }
\end{array} \
\hline \begin{array} { l r }
\text { Work in process inventory, } \
\text { April 1 }
\end{array} & 8,000 & 50 \% \
\hline \begin{array} { l }
\text { Transferred in the during } \
\text { the month }
\end{array} & 50,000 & \
\hline \begin{array} { l }
\text { Work in process inventory, } \
\text { April 30 }
\end{array} & 10,000 & 70 \% \
\hline
\end{array}$
All materials are added at the beginning of processing in the Blending Department.

- Using the FIFO method,what are the equivalent units of production for labour and overhead for the month?
A) 47,000 units.
B) 51,000 units.
C) 5,000 units.
D) 54,000 units.

Question

The activity in Nolan Company's Blending Department for the month of April is given below:
$\begin{array} {| l | r | r | } 
\hline & \text { Number of Units } & \begin{array} { r } 
\text { Labour and overhead } \
\text { percentage complete }
\end{array} \
\hline \begin{array} { l r } 
\text { Work in process inventory, } \
\text { April 1 }
\end{array} & 8,000 & 50 \% \
\hline \begin{array} { l } 
\text { Transferred in the during } \
\text { the month }
\end{array} & 50,000 & \
\hline \begin{array} { l } 
\text { Work in process inventory, } \
\text { April 30 }
\end{array} & 10,000 & 70 \% \
\hline
\end{array}$
All materials are added at the beginning of processing in the Blending Department.

- Using the FIFO method,what are the equivalent units of production for labour and overhead for the month?
A) 47,000 units.
B) 51,000 units.
C) 5,000 units.
D) 54,000 units.

Quizplus · Accepted Answer

Under the FIFO method, equivalent units for labor and overhead are calculated by considering the work done during the current period. The units started and completed are 48,000 (50,000 transferred in - 2,000 in ending WIP). Add the work needed to complete the beginning WIP (8,000 units * 50% remaining) and the work done on ending WIP (10,000 units * 70% complete), resulting in 51,000 equivalent units.

The Activity in Nolan Company's Blending Department for the Month