If beginning inventory contained 2,000 units of product that were judged to be 40 percent complete as to labor, the equivalent units of production for labor during the current period under the FIFO method for these 2,000 units are

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Quizplus · Accepted Answer

FIFO method assumes that the units completed first are sold first, therefore, the beginning inventory units (2,000) are considered completed with respect to materials but are only 40% complete as to labor. Therefore, the equivalent units of production for labor during the current period for these 2,000 units would be 40% of 2,000, which is 800 units. In addition to that, any units started and completed during the current period will be counted in full, resulting in a total equivalent unit of production for labor of 1,200 (800 + 400). Thus, Option C is the correct choice.

If Beginning Inventory Contained 2,000 Units of Product That Were