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

a. 15,650

Step-by-step 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.