Question

Duffy Company makes fabric-covered hatboxes. The company began April with 500 boxes in process that were 100 percent complete as to cardboard, 80 percent complete as to cloth, and 60 percent complete as to conversion costs. During the month, 3,300 boxes were started. On April 30, 350 boxes were in process (100 percent complete as to cardboard, 70 percent complete as to cloth, and 55 percent complete as to conversion costs. Using the FIFO method, what are equivalent units for cloth? a) 3,295 b) 3,395 c) 3,450 d) 3,595

Answer 1

Calculation of equivalent units for cloth using FIFO method
	Physical Units (in boxes)	% Completed for Cloth	Equivalent units for cloth
Boxes completed
- Out of beginning Inventory	500	20%	100
- Out of boxes started	2950	100%	2950
Total Completed Boxes	3450		3050
Ending Inventory , April 30	350	70%	245
Equivalent units for Cloth			3295
The answer is Option a.
Working
Calculation of number of boxes completed during April
Beginning Inventory,April 1	500
Add : Number of boxes started	3300
Less : Ending Inventory,April 30	350
Number of boxes completed during April	3450