During March, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of the units transferred, 25,000 were in process at the beginning of March and 110,000 were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor. At the end of March, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to labor. Compute the number of equivalent units with respect to both materials and direct labor respectively for March using the FIFO method.
A) 165,000; 165,000.
B) 135,000; 119,000.
C) 140,000; 130,250.
D) 165,000; 144,000.
E) 144,000; 144,000.

Question

Quizplus · Accepted Answer

First, calculate the equivalent units for materials:

Beginning WIP: 25,000 units x 100% = 25,000
Started and completed in March: 110,000 units x 100% = 110,000
Ending WIP: 30,000 units x 100% = 30,000
Total equivalent units for materials = 25,000 + 110,000 + 30,000 = 165,000

Next, calculate the equivalent units for direct labor:

Beginning WIP: 25,000 units x 55% = 13,750
Started and completed in March: 110,000 units x 100% = 110,000
Ending WIP: 30,000 units x 30% = 9,000
Total equivalent units for direct labor = 13,750 + 110,000 + 9,000 = 132,750

Therefore, the answer is (C) 140,000; 130,250.

During March, the Production Department of a Process Manufacturing System