Question

The following production data were taken from the records of the Finishing Department for July:
Inventory in process, March 1, 30% completed 4,000 units
Transferred to finished goods during March 38,500 units
Ending work in process during March, 40% completed 3,500 units
Determine the total equivalent units for direct materials, assuming that the first-in, first-out method is used to cost inventories. Assume that all direct materials are placed in process at the beginning of production.

Answer 1

Answer:

38,000 units

Explanation:

The computation of the total equivalent units for the direct material using the FIFO method is shown below:

= Completed and transferred units × completion percentage + ending work in process units × completion percentage

= (38,500 units - 4,000 units) × 100% + 3,500 units × 100%

= 34,500 units + 3,500 units

= 38,000 units