Question

During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 54,000 were in process in the production department at the beginning of April and 300,000 were started and completed in April. April's beginning inventory units were 60% complete with respect to materials and 40% complete with respect to labor. At the end of April, 68,000 additional units were in process in the production department and were 60% complete with respect to materials and 30% complete with respect to labor. Compute the number of equivalent units with respect to both materials used and labor used in the production department for April using the FIFO method. Direct Materials Direct Labor Number of equivalent units

Answer 1

Calculation of equivalent units Direct material Direct Labor Units in beginining WIP(A) 54,000 54,000 % of completion of beginining 60% 40% WIP in previous period (B) 40% 60% 21600 32400 % of beginining WIP completed this period (C=100%-B) Equivalent units in beginining WIP (D=A*C) Units both started and completed in current period (E) Units of ending WIP(F) % of completion of ending WIP (G) Equivalent units in ending WIP (H=FG) Total equivalent units(D+E+H) 300,000 68,000 60% 300,000 68,000 30% 40800 362,400 20400 352,800