Answer:
FIFO method equivalent units are obtained by adding the beginning WIP and units started and deducting the ending WIP.
The equivalent units under each of the three assumptions are
Materials Conversion <u>67,800 67,800</u>
Materials Conversion<u>56730 56730</u>
Materials Conversion <u>69060 69060</u>
Explanation:
<u>Assumption 1 : </u>all materials are added at the beginning of the process and conversion is 100% complete
<u>Particulars Units % of Completion Equivalent Units</u>
<u> Materials Conversion Materials Conversion </u>
BWIP 25,200 100 100 25,200 25,200
Add
Units Started 58,800 58,800 58,800
Less
Units Completed
<u> 16,200 16,200 16,200</u>
<u>Equivalent Units 67,800 67,800</u>
<u />
<u>Assumption 2:</u>
Beginning Inventory is 40% complete as to materials and conversions and ending inventory is complete 75 %as to materials and conversions.
<u>Particulars Units % of Completion Equivalent Units</u>
<u> Materials Conversion Materials Conversion </u>
BWIP 25,200 40 40 10,080 10,080
Add
Units Started 58,800 58,800 58,800
Less
Units Completed
<u> 16,200 75 75 12150 12150</u>
<u>Equivalent Units 56730 56730</u>
<u />
<u>Assumption 3:</u>
Beginning Inventory is 60% complete as to materials and conversions and ending inventory is complete 30 %as to materials and conversions.
<u>Particulars Units % of Completion Equivalent Units</u>
<u> Materials Conversion Materials Conversion </u>
BWIP 25,200 60 60 15,120 15,120
Add
Units Started 58,800 58,800 58,800
Less
Units Completed
<u> 16,200 30 30 4860 4860</u>
<u>Equivalent Units 69060 69060</u>
<u />
FIFO method equivalent units are obtained by adding the beginning WIP and units started and deducting the ending WIP.
