Question

Department E had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. During the period, 14,000 units of direct materials were added at a cost of $28,700, and 15,000 units were completed. At the end of the period, 3,000 units were 75% completed. All materials are added at the beginning of the process. Direct labor was $32,450, and factory overhead was $18,710. The number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories was:
a. 15,650
b. 18,000
c. 17,250
d. 17,700

Answer 1

Answer:

a. 15,650

Explanation:

Department E

FIFO Equivalent Units

Particulars           Units               % of Completion            Equivalent Units

                                        Materials   Conversion     Materials  Conversion

Units Complete   15000         100           100               15000        15000

Add Ending Inv    3000            100           70                3000         2250

less

Beginning Inv.  4000       100                40                4000         1600

Equivalent Units                                                         14000         15650

The equivalent units for materials using FIFO are 14000 and for conversion are 15650.

In FIFO we add the completed units with the % of complete units in the ending inventory and subtract the beginning Work in Process Opening Inventory % complete units.

We need to calculate the units first transferred out.