If 10,000 units that were 50% completed were in process on November 1, 90,000 units were completed during November, and 20,000 units were 20% completed on November 30, the number of equivalent units of production for November was 90,000.
(Assume no loss of units in production and that inventories are costed by the first-in, first-out method.)

Question

If 10,000 units that were 50% completed were in process on November 1, 90,000 units were completed during November, and 20,000 units were 20% completed on November 30, the number of equivalent units of production for November was 90,000. 
(Assume no loss of units in production and that inventories are costed by the first-in, first-out method.)

Quizplus · Accepted Answer

The number of equivalent units of production for November is calculated by adding the equivalent units for units completed during November and the equivalent units for units in process at the end of November. The equivalent units for units in process at the end of November can be calculated as follows:

20,000 units × 20% = 4,000 equivalent units

The equivalent units for units completed during November can be calculated using the weighted average method or the FIFO method. Assuming the FIFO method:

Equivalent units for 10,000 units that were 50% completed on November 1 = 5,000
Equivalent units for 90,000 units completed during November = 90,000

Total equivalent units = 5,000 + 90,000 + 4,000 = 99,000

Therefore, the statement that the number of equivalent units of production for November was 90,000 is false.

If 10,000 Units That Were 50% Completed Were in Process