Question

Bryant Manufacturing produces its product in two sequential processing departments. During October, the first process finished and transferred 322,000 units of its product to the second process. Of these units, 71,000 were in process at the beginning of the month and 251,000 were started and completed during the month. At month-end, 51,000 units were in process. Using the FIFO method, compute the number of equivalent units of production for direct materials for the process assuming that beginning work in process inventory is 30% complete for direct materials cost and ending inventory is 80% complete for direct materials cost.

Answer 1

For the month of October, there were 326,500 equivalent units of output for the process's direct materials.

Explaination

Initial inventory of work in progress = 65,000 units

30 percent of the initial inventory has been completed.

45,000 pieces remain in the work-in-progress inventory.

245,000 units were started and finished throughout the time frame.

Ending work-in-progress inventory completion percentage = 80%

Equivalent Units of Production (FIFO) are calculated as follows: Units started and completed during the period + [Ending Work in Process Inventory x Percentage of Completion of Ending Work in Process Inventory] + [Beginning Work in Process Inventory x Percentage Completion of Beginning Work in Process Inventory].

Equivalent Units of Production (FIFO) = [45,000 x 80%] + [65,000 x 100%-30%] + 245,000

Equivalent Units of Production (FIFO) = 45,500 + 245,000 + 36,000

326,500 units are the equivalent units of production (FIFO).

As a result, 326,500 units are the equivalent units of production for the first process's direct materials.

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