If 10,000 units that were 40% completed are in process at November 1, 80,000 units were completed during November, and 12,000 were 20% completed at November 30, the number of equivalent units of production for November was 75,600. (Assume no loss of units in production and that inventories are costed by the first-in, first-out method.)

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Richard Williamson · Accepted Answer

Final Answer : False, Explanation :  To calculate the equivalent units of production, we consider the work done on units in the beginning inventory, units completed and transferred out, and work done on units still in process at the end of the period. For the beginning inventory, 10,000 units were 40% completed, which means 60% of the work remains to be done on them during November. However, under the FIFO method, we only consider the work done during the current period, so we start calculations with the units and work done in November alone. The 80,000 units completed during November are fully accounted for, and the 12,000 units that are 20% completed at the end of November are partially accounted for. The calculation should focus on the units fully completed and the equivalent units for the work in process at the end of the period.The correct calculation for equivalent units of production under FIFO for November would be:- 100% of the 80,000 units completed = 80,000 equivalent units- Plus 20% of the 12,000 units in ending inventory = 2,400 equivalent unitsTotal equivalent units of production for November = 80,000 + 2,400 = 82,400 units.

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