Question

Sussex Corporation's production cycle starts in the Mixing Department. The following information is available for April:Work in process, April 30 (60% complete) 25,000 unitsTotal units in process during April 280,000 unitsWork in process, April 1 (25% complete) 40,000 unitsMaterials are added at the beginning of the process in the Mixing Department. What are the equivalent units of production for the month of April, assuming Sussex uses first-in, first-out (FIFO), process costing.a. 240,000 235,000b. 240,000 260,000c. 280,000 270,000d. 315,000 285,000e. 320,000 295,000A. aB. bC. cD. dE. e

Answer 1

b. 240,000 260,000

Step-by-step explanation:

Conversion Cost:

Units processed during the month 280,000

Unfinished Ending WIP

25,000 x (1-60%) (10,000)

Beginning WIP:

40,000 x 25% = (10,000)

Equivalent units 240,000

Notes:

Total units in process refer to all the physical units that past through the process.

During the month the total unit in process were 280,000.

From those units there are 40,000 there was 25% of the work done in prior period so it should not be accounted for this month. This is will be subtracted.

Also the incomplete portion of the ending WIP will be subtracted, because are units not complete.

DIRECT MATERIALS

Units processed during the month 280,000

Beginning inventory (40,000)

Equivalent untis 240,000

For the materials, they are added entirely at the beggining of the process All units are at 100%

So from those 280,000 units there are 40,000 which are from the previous month, so we subtracted from the accounted for the month