Figure 6-7 Edelstein Company had the following data for 2014:
Materials are added at the beginning of the process. Beginning work in process was 40 percent complete as to conversion. Ending work in process was 70 percent complete as to conversion.
Refer to Figure 6-7. How many equivalent units for materials would there be using the FIFO method?

Question

Figure 6-7 Edelstein Company had the following data for 2014:
 Materials are added at the beginning of the process. Beginning work in process was 40 percent complete as to conversion. Ending work in process was 70 percent complete as to conversion.
Refer to Figure 6-7. How many equivalent units for materials would there be using the FIFO method?

Quizplus · Accepted Answer

The FIFO method assumes that units completed and transferred out are made up of the units that were first added to the process. Therefore, we only need to account for the units added in the beginning work in process (BWIP) and the units added during the current period. The equivalent units for materials using the FIFO method would be:

BWIP: 40% of 10,000 units = 4,000 units
Current period: 30,000 units
Total equivalent units for materials = 4,000 + 30,000 = 34,000
However, since the ending work in process (EWIP) is 70% complete as to conversion, we need to adjust the equivalent units for materials to account for the partially completed units. The equivalent units for materials for the EWIP are:
70% of 4,000 units = 2,800 units
Total equivalent units for materials (adjusted for EWIP) = 34,000 + 2,800 = 36,800
Therefore, the correct answer is C (40,000 units) as it represents the sum of the BWIP, current period, and adjusted EWIP equivalent units for materials using the FIFO method.

Figure 6-7 Edelstein Company Had the Following Data for 2014