QuestionJuly 19, 2025

A company is using process costing with the first-in, first-out (FIFO) method and all costs are added evenly throughout the manufacturing process, If there are 5,000 units in beginning work in process inventory 30% complete), 10,000 units in ending work in process inventory 60% complete), and 25,000 units started in process this period, how many equivalent units are there for this period? a. 22,500 units. b. 26,000 units. c. 24,500 units. d. 25,000 units.

A company is using process costing with the first-in, first-out (FIFO) method and all costs are added evenly throughout the manufacturing process, If there are 5,000 units in beginning work in process inventory 30% complete), 10,000 units in ending work in process inventory 60% complete), and 25,000 units started in process this period, how many equivalent units are there for this period? a. 22,500 units. b. 26,000 units. c. 24,500 units. d. 25,000 units.
A company is using process costing with the first-in, first-out (FIFO) method and all costs are added evenly throughout the
manufacturing process, If there are 5,000 units in beginning work in process inventory 30%  complete), 10,000 units in ending
work in process inventory 60%  complete), and 25,000 units started in process this period, how many equivalent units are there
for this period?
a. 22,500 units.
b. 26,000 units.
c. 24,500 units.
d. 25,000 units.

Solution
3.4(286 votes)

Answer

34,500 units Explanation 1. Calculate Completed Units Subtract beginning inventory from units started and add ending inventory: 25,000 - 5,000 + 10,000 = 30,000 units. 2. Calculate Equivalent Units for Beginning Inventory Multiply the remaining percentage to complete by beginning inventory: 5,000 \times (1 - 0.3) = 3,500 equivalent units. 3. Calculate Equivalent Units for Ending Inventory Multiply completion percentage by ending inventory: 10,000 \times 0.6 = 6,000 equivalent units. 4. Sum Equivalent Units Add completed units, equivalent units for beginning inventory, and equivalent units for ending inventory: 25,000 + 3,500 + 6,000 = 34,500 equivalent units.

Explanation

1. Calculate Completed Units<br /> Subtract beginning inventory from units started and add ending inventory: $25,000 - 5,000 + 10,000 = 30,000$ units.<br /><br />2. Calculate Equivalent Units for Beginning Inventory<br /> Multiply the remaining percentage to complete by beginning inventory: $5,000 \times (1 - 0.3) = 3,500$ equivalent units.<br /><br />3. Calculate Equivalent Units for Ending Inventory<br /> Multiply completion percentage by ending inventory: $10,000 \times 0.6 = 6,000$ equivalent units.<br /><br />4. Sum Equivalent Units<br /> Add completed units, equivalent units for beginning inventory, and equivalent units for ending inventory: $25,000 + 3,500 + 6,000 = 34,500$ equivalent units.
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