During August,the Filtering Department of Olive Inc.had beginning transferred in balance of 200 units with costs of $50,000.During the month,it started and completed 250 units.It had 50 units in the ending Work-in-Process Inventory.What is the number of equivalent units of production for transferred in units in the Filtering Department in August under the first-in-first-out (FIFO)method?

Question

Quizplus · Accepted Answer

Under the FIFO method, the equivalent units of production for transferred in units are calculated by considering the units completed during the period plus the units in ending work-in-process inventory that were started during the period.

The 250 units completed during the period are fully completed units, so they count as 250 equivalent units.

The 50 units in ending work-in-process inventory are started units, since they were not fully completed during the period. To calculate the equivalent units for these units, we need to consider the degree of completion. Since the problem does not provide any information about the degree of completion, we assume that it is 100%. Therefore, the 50 units in ending work-in-process inventory count as 50 equivalent units.

Adding these two numbers, we get: 
Equivalent units of production for transferred in units = 250 + 50 = 300 units