Question

The Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department had 3,840 liters in beginning work in process inventory (30% complete). During the period 64,880 liters were completed. The ending work in process was 5,160 liters (70% completed). All inventories are costed by the first-in, first-out method. What is the total equivalent units for direct materials (using the FIFO method) if materials were added at the beginning of the process

Answer 1

Total equivalent units of materials = 64,652

Step-by-step explanation:

Equivalent units are useful to apportion cost between work in progress and completed units. They are notional whole units which represent incomplete work

Equivalent Units = Degree of work completed (%) × inventory units

Fully worked = 64,880- 3,840= 61,040

Items units workings Equivalent units

Opening inventory 3,840 3840× 70% = 2,688

Fully worked 61,040 61,040× 100 = 61,040

Closing WIP 5,160 5,160× 70% = 3,612

Total equivalent units of materials 64,652

Total equivalent units of materials =64,652