Rollins Manufacturing
Rollins Manufacturing uses process costing. The following information was available for the current year:

$\begin{array}{lrr}
\text { Number of units in beginning work-in-process inventory } & 4000 & \text { (30\% complete) } \
\text { Number of units started in the current period } & 35000 & \
\text { Number of units in ending work-in-process inventory } & 3000 & \text { (80\% complete) }
\end{array}$

-If Rollins uses the first-in,first-out (FIFO)method,how many total equivalent units were completed in the current period?
A) 37 200 equivalent units
B) 35 600 equivalent units
C) 41 200 equivalent units
D) 35 400 equivalent units

Question

Rollins Manufacturing
Rollins Manufacturing uses process costing. The following information was available for the current year:

$\begin{array}{lrr}
\text { Number of units in beginning work-in-process inventory } & 4000 & \text { (30\% complete) } \
\text { Number of units started in the current period } & 35000 & \
\text { Number of units in ending work-in-process inventory } & 3000 & \text { (80\% complete) }
\end{array}$

-If Rollins uses the first-in,first-out (FIFO)method,how many total equivalent units were completed in the current period?
A) 37 200 equivalent units
B) 35 600 equivalent units
C) 41 200 equivalent units
D) 35 400 equivalent units

Quizplus · Accepted Answer

To calculate the total equivalent units completed in the current period using the FIFO method, we first adjust for the work needed to complete the beginning inventory, then add the work done on new units started and completed this period, and finally adjust for the ending inventory. Beginning inventory units were 30% complete, so 70% of the work remained to be done on the 4,000 units, which equals 2,800 equivalent units (4,000 units * 70%). 35,000 units were started, and assuming all beginning inventory units were completed plus some of the new units, we have a total of 35,000 units to account for minus the 3,000 units in ending inventory, leaving 32,000 units that were fully completed this period. The ending inventory of 3,000 units was 80% complete, but since we're using FIFO, we only consider work done in the current period. Therefore, these units do not affect the calculation of completed units directly but are subtracted from the total started to find how many were fully completed.Adding the work to finish the beginning inventory (2,800 equivalent units) to the units fully completed (32,000 units), we get 34,800 equivalent units. However, this calculation does not align with the provided options, indicating a need to reassess the calculation steps based on the FIFO method and the information given.Correctly, we should calculate the equivalent units for work done in the current period as follows: - For the beginning inventory, we consider only the work done in the current period to complete these units. Since they were 30% complete at the start, 70% of the work was done in the current period, but this is on the work to complete them, not on new units.- All 35,000 units started would have had work done on them during the period.- For the ending inventory, we don't subtract these from the units started or completed since we're calculating equivalent units, not completed units. Instead, we calculate the equivalent units based on the percentage completion of these ending inventory units concerning the work done in the current period.Given the misunderstanding in the initial explanation, let's correct the approach focusing on equivalent units:1. Units to complete beginning inventory: 4,000 units * 70% = 2,800 equivalent units.2. Units fully completed and started this period: 35,000 units started - 3,000 units in ending inventory = 32,000 units that were fully processed and completed during the period.3. Equivalent units for ending inventory: 3,000 units * 80% = 2,400 equivalent units.The correct calculation should focus on the equivalent units for work done during the period, which involves adding the equivalent units for the work to complete the beginning inventory and the work done on new and ending inventory units. However, the provided explanation and calculation did not accurately reflect the correct method for calculating equivalent units under FIFO, leading to confusion.Given the options and the calculation mistake acknowledged, the correct approach to find the total equivalent units specifically under FIFO isn't accurately reflected in the initial explanation, which incorrectly focused on completed units rather than equivalent units. The correct calculation involves understanding that under FIFO, we calculate the work done on units during the current period only, which includes finishing beginning inventory and processing new units, while also considering the state of completion of the ending inventory. The provided options and the calculation method suggest a misunderstanding in applying the FIFO method to the scenario.

Rollins Manufacturing Rollins Manufacturing Uses Process Costing -If Rollins Uses the First-In,first-Out (FIFO)method,how Many Total Equivalent Units

Rollins Manufacturing
Rollins Manufacturing Uses Process Costing -If Rollins Uses the First-In,first-Out (FIFO)method,how Many Total Equivalent Units