The following production data were taken from the records of the Finishing Department for June:

Inventory in process, June 1, 25% completed 1,500 units Transferred to finished goods during June 5,000 units Equivalent units of production during June 5,200 units

Determine the number of equivalent units of production in the June 30, Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories. The completion percentage of 25% applies to both direct materials and conversion costs.

Question

Business

Rudy

20 April, 05:50

The following production data were taken from the records of the Finishing Department for June:

Inventory in process, June 1, 25% completed 1,500 units Transferred to finished goods during June 5,000 units Equivalent units of production during June 5,200 units

Determine the number of equivalent units of production in the June 30, Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories. The completion percentage of 25% applies to both direct materials and conversion costs.

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Emmy Mejia · Answer 1

The number of equivalent units of production in the June 30, Finishing Department inventory is 575 units.

Explanation:

In order to calculate the number of equivalent units of production in the June 30 Finishing Department inventory, we would have to use the following formula:

Equivalent unit of production = (Beginning WIP*percent completion) + Unit started and completed + (Ending WIP*percent completion)

5,200 = (1,500*75%+3,500) + X

5,200 = 4,625+X

X (Equivalent unit of ending WIP) = 5,200-4,625 = 575

The number of equivalent units of production in the June 30, Finishing Department inventory is 575 units