In applying the first-in, first-out method of costing inventories, if 8,000 units which are 30% completed are in process at June 1, 28,000 units are completed during June, and 4,000 units were 75% completed at June 30, the number of equivalent units of production for June was 33,400.

Question

Quizplus · Accepted Answer

The equivalent units of production should be calculated by adding the equivalent units completed during the period (28,000) to the equivalent units in process at the end of the period (4,000 x 75% = 3,000), which gives a total of 31,000 equivalent units. The 8,000 units in process at the beginning of the period should not be included in the calculation of equivalent units because they are not completed during the period. Therefore, the statement in the question is false.

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