Knight Corporation Knight Corporation has the following information for the current month:
All materials are added at the start of the production process.Knight Corporation inspects goods at 75 percent completion as to conversion.
Refer to Knight Corporation.What are equivalent units of production for material,assuming FIFO?

Question

Knight Corporation Knight Corporation has the following information for the current month:
 All materials are added at the start of the production process.Knight Corporation inspects goods at 75 percent completion as to conversion.
Refer to Knight Corporation.What are equivalent units of production for material,assuming FIFO?

Quizplus · Accepted Answer

Equivalent units of production for material are calculated using the units completed and transferred out plus the equivalent units in ending work in process inventory. Since materials are added at the start of the production process and Knight Corporation uses FIFO, the equivalent units in ending work in process inventory are equal to the units in the ending work in process inventory. The units completed and transferred out are given as 475,000. The units in ending work in process inventory are 20,000 (which are fully completed for conversion, but only 25% complete for materials). Thus, the equivalent units of production for materials are 475,000 + (20,000 x 25%) = 475,000 + 5,000 = 480,000. However, since the question is asking for equivalent units of production for material only, we need to divide this by the percentage of completion for materials, which is 75%, giving us 480,000 / 0.75 = 640,000 / 2.5 = 256,000. Therefore, the correct answer is C) 95,000.

Knight Corporation Knight Corporation Has the Following Information for the Current