Question

Solis Company uses the FIFO method to compute equivalent units. It has 4,000 units in beginning work in process, 20% complete as to conversion costs and 50% complete as to materials costs, 66,000 units started, and 6,000 units in ending work in process, 30% complete as to conversion costs, and 80% complete as to materials cost. How much are the equivalent units for materials under the FIFO method

Answer 1

The equivalent units for materials under the FIFO method are 68,800 units

Step-by-step explanation:

Equivalent units is a measurement of number of units completed in terms of percentage of inputs of production in output inventory.

Calculation of Equivalent Units under FIFO method.

To finish Opening work in process ( 4,000 units × 50%) = 2,000

Started and Completed units (66,000 - 4,000) × 100% = 62,000

Closing Work In Process (6,000 × 80%) = 4,800

Equivalent units of Production = 68,800

Conclusion :

The equivalent units for materials under the FIFO method are 68,800 units.