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FIFO EUP In manufacturing its products, Trevano Corp. adds all direct material at the beginning of...

FIFO EUP
In manufacturing its products, Trevano Corp. adds all direct material at the beginning of the production process. The company’s direct labor and overhead are considered to be continuously at the same degree of completion. The company uses the FIFO method of process costing. September production information is as follows:

Beginning WIP Inventory 10,000 pounds
Started during September 25,000 pounds
Completed during September 32,000 pounds

As of September 1, the beginning WIP Inventory was 30 percent complete as to labor and overhead. On September 30, the ending WIP Inventory was 80 percent complete as to conversion.

a. What proportion of work needs to be performed on the beginning inventory units to complete them? Answer

%
b. What are the equivalent units of production for direct material? Answer

pounds
c. What are the equivalent units of production for conversion? Answer

pounds

Solutions

Expert Solution

  • [a]

Proportion of work needs to be performed = (100% - 30% complete)
= 70%

  • [b] Equivalent units for direct material – 25000 units
  • [c] Equivalent units for conversion = 31400 units

EUP - FIFO Method

Units

% Material

EUP Materials

% Conversion

EUP - Conversion

Units of ENDING WIP

                                   3,000

100.0%

                     3,000

80.0%

                                2,400

Units STARTED & COMPLETED

                                22,000

100%

                   22,000

100%

                             22,000

Units of beginning WIP

                                10,000

0.00%

                            -  

70%

                                7,000

Equivalent Units of Production

                   25,000

                             31,400

ekkarill92 answered 1 year ago
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