The following data are available for a company's manufacturing activities:
$\begin{array}{ll}
\text { Beginning goods in process inventory } & 5,000 \text { units, } 1 / 4 \text { of the labor added this } \
& \text { period } \
\text { Units started and completed } & 15,000\
\text { Ending goods in process inventory}& 6,000 \quad 6,000 \text { units, $ 1 / 2 $ of the labor added this }\
&\text { period}
\end{array}$
Assume the company uses FIFO inventory.If materials are added when the production process begins and direct labor is applied uniformly throughout the process,what are the equivalent units for direct materials and for direct labor,respectively?
A) 16,250; 19,250
B) 16,250; 21,750
C) 21,000; 19,250
D) 19,250; 18,750
E) 21,000; 22,250

Question

The following data are available for a company's manufacturing activities:
$\begin{array}{ll}
\text { Beginning goods in process inventory } & 5,000 \text { units, } 1 / 4 \text { of the labor added this } \
& \text { period } \
\text { Units started and completed } & 15,000\
\text { Ending goods in process inventory}& 6,000 \quad 6,000 \text {  units, $ 1 / 2 $ of the labor added this }\
&\text { period}
\end{array}$
Assume the company uses FIFO inventory.If materials are added when the production process begins and direct labor is applied uniformly throughout the process,what are the equivalent units for direct materials and for direct labor,respectively?
A) 16,250; 19,250
B) 16,250; 21,750
C) 21,000; 19,250
D) 19,250; 18,750
E) 21,000; 22,250

Quizplus · Accepted Answer

For direct materials, equivalent units are 21,000 (15,000 units started and completed + 6,000 ending inventory). For direct labor, equivalent units are 19,250 (15,000 units started and completed + 1,500 from beginning inventory + 3,000 from ending inventory).

The Following Data Are Available for a Company's Manufacturing Activities