Question

g Salmont Corporation uses the FIFO method in its process costing system. The company reported 28,000 equivalent units of production for materials last month. The company's beginning work in process inventory consisted of 7,500 units, 40% complete with respect to materials. The ending work in process inventory consisted of 5,500 units, 70% complete with respect to materials. The number of units started during the month was:

Answer 1

Answer:

25,150 units

Explanation:

The question is to determine the number of production units that were started during the month.

Note that the company uses the First In First Out method for Process costing

Description                          Units in Process   completion (%)   Equivalent    

                                                                                                     completed (units)                              

The Equivalent Units             28,000                     100              28,000

Subtract:

Opening Work-in- progress    7,500                       60                 4,500

Closing Work in Progress       5,500                        70                3,850

Equivalent Units Started and Completed                                  19,650

Step 2: Equivalent Units Started

= Eqivalent Units started and completed +  Total Ending Units    

= 19,650 + 5,500 =     25,150 units