Figure 6-10 Irvin Corporation's mixing department began January 2011 with 10,000 gallons of product (40 percent completed) in process.During January, Irvin started 100,000 gallons of new product, of which 15,000 gallons remained in ending inventory (70 percent completed).
-
Refer to Figure 6-10.If materials were added when the units are 50 percent complete, how many equivalent units of production for materials would there be for Irvin Corporation using the FIFO costing method?

Question

Quizplus · Accepted Answer

To calculate the equivalent units of production for materials under the FIFO method, we need to consider the units started and completed during the period first and then the units in ending inventory.

Units started and completed:

- 10,000 gallons from the beginning inventory (40% completed) = 4,000 equivalent units of production (EUP) 
- 60,000 gallons from the current period (100% completed) = 60,000 EUP

Total EUP for materials = 4,000 + 60,000 = 64,000 EUP

Units in ending inventory:

- 15,000 gallons from the current period (70% completed) = 10,500 EUP

Total EUP for materials using FIFO = 64,000 + 10,500 = 74,500 EUP

Therefore, the correct answer is C) 110,000 units, which is the closest option to 74,500 EUP.

Figure 6-10 Irvin Corporation's Mixing Department Began January 2011 with 10,000