Question

Assume that 11 comma 200 units were in beginning WIP​ Inventory, 35 comma 500 were​ started, 33 comma 000 were​ completed, and 13 comma 700 were in ending WIP Inventory. Direct materials are added at the beginning of the process. What are the total equivalent units for direct​ materials?

Answer 1

Answer:

If company uses weighted average method, then equivalent unit of direct material = Units completed + units in ending WIP

= 33,000 + 13,700

= 46,700 units

If company uses FIFO method, then equivalant unit of direct material = Unit started and completed + Units in ending WIP  

= 33,000 - 11,200 + 13,700

= 35,500 units