Landry Co.had the following information for the month of December.All direct materials were one hundred percent complete,and beginning materials cost $14,000.
Total equivalent units for materials under the FIFO method are calculated to be:
A)1,110 equivalent units.
B)1,080 equivalent units.
C)1,032 equivalent units.
D)1,008 equivalent units.
E)1,320 equivalent units.

Question

Landry Co.had the following information for the month of December.All direct materials were one hundred percent complete,and beginning materials cost $14,000. 
Total equivalent units for materials under the FIFO method are calculated to be:
A)1,110 equivalent units. 
B)1,080 equivalent units. 
C)1,032 equivalent units. 
D)1,008 equivalent units. 
E)1,320 equivalent units.

Quizplus · Accepted Answer

The equivalent units of materials are calculated as follows:
Units completed and transferred out: 1,100
Ending work in process (40% x 2,000): 800
Total equivalent units: 1,900
Using the FIFO method, we assume that the units completed and transferred out come from the beginning inventory, followed by the units started and completed during the month. Therefore, the equivalent units of beginning inventory are not included in the calculation. Thus, the total equivalent units for materials under the FIFO method are 1,900 - 820 (ending inventory for conversion) = 1,080.

Landry CoHad the Following Information for the Month of December