Question

35 Sunland Company uses the FIFO method to calculate equivalent units. It has 2300 units in...

35

Sunland Company uses the FIFO method to calculate equivalent units. It has 2300 units in beginning Work in Process, 25% complete as to conversion costs and 55% complete as to materials costs, 24500 units started, and 3300 units in ending Work in Process, 35% complete as to conversion costs, and 70% complete as to materials cost. How much are the equivalent units for materials under the FIFO method?

24545

24500

25810

26800
Business   Accounting   
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Answer #1

Solution :

The Answer is (a) 24,545.

Working :

Units Completed = Opening Units + Units Started - Ending Units

= 2,300 + 24,500 - 3,300

= 23,500

Equivalent Units in Respect of Material under FIFO Basis :

Particulars Units Particulars Units % Completed Equivalent Units
Units Completed 23,500 From Opening Units 2,300 45% 1,035
Ending Inventory 3,300 From Current Units 21,200 100% 21,200
Total 23,500 22.235
Ending Inventory 3,300 70% 2,310
Total 24,545

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