Using the first-in, first-out (FIFO) method, the equivalent units of production (EUP) for materials are Direct Materials Completion of BWIP 6,400 Started & Completed 76,000 Starting of EWIP 21,600 TOTAL EUP-FIFO 104,000 Under the FIFO method of process costing we need to make three calculations to determine the EUP. These are: calculate (1) how many EUP were required to finish BWIP, (2) how many units were started and completed and (3) how many EUP were needed to start the EWIP. There were 16,000 units in BWIP and they were 60% complete for materials, meaning that they needed to do 40%, or 6,400 EUP to finish BWIP. There were a total of 76,000 units started and completed during the period (92,000 completed minus the 16,000 in BWIP). There were 24,000 units in EWIP that were 90% complete for materials, meaning that 21,600 EUP of materials had been done on the EWIP. Adding these three numbers together, we get 104,000 units.
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This answer results from two errors. (1) The number of units started and completed is miscalculated. The correct way to calculate it is to subtract the total number of physical units in beginning work-in-process inventory from the total number of units completed. This answer results from subtracting only the equivalent number of units in beginning work-in-process inventory that were completed during the current month. In this question, since the number of units started and the number of units in ending work-in-process inventory are given, the number of units started and completed can also be calculated by subtracting the total physical units in ending work-in-process inventory from the total number of units started during the period. (2) The answer does not include the work that was needed to complete the units that were in BWIP.
This answer does not include the work that was needed to complete the units that were in BWIP.
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The beginning inventory was 60% complete for materials and 20% complete for conversion costs. The ending inventory was 90% complete for materials and 40% complete for conversion costs. Costs pertaining to the month of May are as follows: Beginning inventory costs are materials, $54,560; direct labor, $20,320; and factory overhead, $15,240. Costs incurred during May are materials used, $468,000; direct labor, $182,880; and factory overhead, $391,160. Using the first-in, first-out (FIFO) method, the equivalent units of production (EUP) for materials are