In applying the first-in, first-out method of costing inventories, if 8,000 units that are 30% completed are in process on June 1, 28,000 units are completed during June, and 4,000 units are 75% completed on June 30, the number of equivalent units of production for June is 33,400.

Question

Quizplus · Accepted Answer

The equivalent units of production for June would be calculated by adding the completed units to the equivalent units for the work in process at the end of the month. The 8,000 units in process at the beginning of June are not considered in the calculation under the FIFO method, as their costs have been accounted for in the previous period. Therefore, the calculation is 28,000 units completed + (4,000 units * 75% completion) = 28,000 + 3,000 = 31,000 equivalent units of production for June.

In Applying the First-In, First-Out Method of Costing Inventories, If