Question
In: Accounting
Anzalone Corporation adds raw materials to production at the beginning of the process in the Assembly...
Anzalone Corporation adds raw materials to production at the
beginning of the process in the Assembly Department. Materials data
for this department for May 2018 are as follows:
| Costs | |||
| Units | Materials | Conversion | |
| Work in process, May 1 | 25,000 | $ 68,750 | $167,650 |
| Started during May | 100,000 | 300,000 | 903,350 |
| Work in process, May 31 | 10,000 | ||
Beginning inventory was 70 percent complete. Ending inventory was
40 percent complete.
How many equivalent units for materials would there be for Anzalone
Corporation in May using the FIFO method?
a.100,000 units
b.119,000 units
c.110,000 units
d.125,000 units
Please explain how to solve for each number, thank you!
Solutions
Expert Solution
Option - A: 100,000 units
Since, Raw Material is introduced at the beginning of the process, which means no Material is required to be added during the Process.
Hence, No material is required for completion of the processing of the Opening of the Work In Process.
The units introduced during the year completely utilizes the material at the time of introduction into the process.
Therefore Equivalent units for Material is equal to the units introduced during the period i.e. 100,000 units
| Particulars | Material | ||
| Units | % of Completion | Equivalent Units | |
| Opening WIP, Processed | 25,000 | 0% | - |
| Units Completed & Transferred | 90,000 | 100% | 90,000 |
| Closing WIP, Processed | 10,000 | 100% | 10,000 |
| Equivalent units of Production | 1,00,000 |
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