Lopez Company uses the FIFO process costing method to determine the product unit cost.The company began the period with 1,800 units in beginning inventory.During the period,32,000 units were started and completed.There were 4,000 units in ending inventory at the end of the period.If all direct materials are added at the beginning of the process,the number of equivalent units for direct materials for the period is
A)29,800.
B)28,000.
C)32,000.
D)36,000.

Question

Quizplus · Accepted Answer

Under the FIFO process costing method, equivalent units for direct materials, when added at the beginning of the process, would include all units started and completed during the period plus the ending inventory, since all materials are added at the beginning. Therefore, the calculation is 32,000 units started and completed + 4,000 units in ending inventory = 36,000 equivalent units for direct materials.

Lopez Company Uses the FIFO Process Costing Method to Determine