Asked by Veronica Vaselin on Jul 12, 2024
Verified
Activities in the Sargent Corporation's Assembly Department for the month of March follow: Using the first-in, first-out method, the equivalent units for materials for March would be:
A) 68,000
B) 65,350
C) 71,000
D) 67,000
Materials
Raw substances or components used in the manufacturing or production process.
Assembly Department
A division within a manufacturing facility where components are assembled into finished products.
First-In, First-Out Method
An accounting method for valuing inventory that assumes the first items placed into inventory are the first sold.
- Acquire knowledge on the accounting procedures for materials costs in a process costing system.
Verified Answer
JO
Jean-Bernard OrivalJul 18, 2024
Final Answer :
B
Explanation :
The equivalent units for materials using the first-in, first-out method are calculated as follows:
Beginning WIP inventory: 10,000 units x 100% = 10,000 equivalent units
Units started and completed: 60,000 units x 100% = 60,000 equivalent units
Ending WIP inventory: 8,000 units x 100% = 8,000 equivalent units
Total equivalent units for materials = 10,000 + 60,000 + 8,000 = 78,000
However, since the question is asking for equivalent units for materials specifically, we need to subtract the equivalent units for conversion costs (which are given as 12,650) from this total. Thus, the final answer is 78,000 - 12,650 = 65,350, which is option B.
Beginning WIP inventory: 10,000 units x 100% = 10,000 equivalent units
Units started and completed: 60,000 units x 100% = 60,000 equivalent units
Ending WIP inventory: 8,000 units x 100% = 8,000 equivalent units
Total equivalent units for materials = 10,000 + 60,000 + 8,000 = 78,000
However, since the question is asking for equivalent units for materials specifically, we need to subtract the equivalent units for conversion costs (which are given as 12,650) from this total. Thus, the final answer is 78,000 - 12,650 = 65,350, which is option B.
Learning Objectives
- Acquire knowledge on the accounting procedures for materials costs in a process costing system.
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