Question

The following data are available for a company's manufacturing activities:Beginning goods in process inventory 5,000 units, 1/4 of the labor added this periodUnits started and completed 15,000Ending goods in process inventory 6,000 units, 1/2 of the labor added this periodAssume the company uses FIFO inventory. If materials are added when the production process begins and direct labor is applied uniformly throughout the process, what are the equivalent units for direct materials and for direct labor, respectively?A. 16,250; 19,250B. 16,250; 21,750C. 21,000; 19,250D. 19,250; 18,750E. 21,000; 22,250

Answer 1

Answer:

The correct answer is C. 21,000; 19,250

Explanation:

First, we are going to get the materials for this period.  Materials are added when the production process begins

Units in production for direct materials  (Remember Materials are added when the production process begins )

Beginning WIP 0  ( the whole materials were added at the previous period)

Started and completed 15,000

Ending WIP 6,000  

Total direct materials  21,000

Units in production for labor

Beginning WIP 1250 ( 1/4 added in this period)

Started and completed 15,000

Ending WIP 3,000  (1/2 of the labor added this period)

Total direct materials  19,250