1.

For each of the following situations, use the FIFO method to determine the equivalent units of production for labor and
overhead, assuming that they are continuously at the same percentage of completion:

a. Beginning WIP Inventory (45% complete) 10,000

Units started in production 350,000
Units transferred out 344,000
Ending WIP Inventory (60% complete) 16,000
Physical inventory Direct material Direct labor Overhead
Beg. WIP 10,000
Started 350,000
Units to account for 360,000

Completed:
Beg. WIP 10,000 0 5,500 5,500
Started 334,000 334,000 334,000 334,000
Ending WIP 16,000 16,000 9,600 9,600
Units accounted for 360,000 350,000 349,100 349,100

Final answers:
The equivalent units of production for direct material is 350,000.
The equivalent units of production for direct labor is 349,100.
The equivalent units of production for overhead is 349,100.

b. Beginning WIP Inventory (30% complete) 40,000

Units started in production 480,000
Units transferred out 494,000
Ending WIP Inventory (70% complete) 26,000
Physical inventory Direct material Direct labor Overhead
Beg. WIP 40,000
Started 480,000
Units to account for 520,000

Completed:
Beg. WIP 40,000 0 28,000 28,000
Started 454,000 454,000 454,000 454,000
Ending WIP 26,000 26,000 18,200 18,200
Units accounted for 520,000 480,000 500,200 500,200

Final answers:
The equivalent units of production for direct material is 480,000.
The equivalent units of production for direct labor is 500,200.
The equivalent units of production for overhead is 500,200.

c. Beginning WIP Inventory (55% complete) 15,000

Units started in production 405,000
Units transferred out 415,800
Ending WIP Inventory (90% complete) 4,200
Physical inventory Direct material Direct labor Overhead
Beg. WIP 15,000
Started 405,000
Units to account for 420,000

Completed:
 Beg. WIP 15,000 0 6,750 6,750
Started 400,800 400,800 400,800 400,800
Ending WIP 4,200 4,200 3,780 3,780
Units accounted for 420,000 405,000 411,300 411,300

Final answers:
The equivalent units of production for direct material is 405,000.
The equivalent units of production for direct labor is 411,300.
The equivalent units of production for overhead is 411,300.

d. Beginning WIP Inventory (25% complete) 10,800

Units started in production 359,100
Units transferred out 351,600
Ending WIP Inventory (45% complete) 18,300
Physical inventory Direct material Direct labor Overhead
Beg. WIP 10,800
Started 359,100
Units to account for 369,900

Completed:
Beg. WIP 10,800 0 8,100 8,100
Started 340,800 340,800 340,800 340,800
Ending WIP 18,300 18,300 8,235 8,235
Units accounted for 369,900 359,100 357,135 357,135

Final answers:
The equivalent units of production for direct material is 359,100.
The equivalent units of production for direct labor is 357,135.
The equivalent units of production for overhead is 357,135.

2. Bayrus Company uses a process costing system to assign costs to its steel production. During March 2010, Bayrus had
beginning Work in Process Inventory of 180,000 tons of steel (100 percent complete as to material and 65 percent complete
as to conversion). During the month, the raw material needed to produce 3,400,000 tons of steel was started in process. At
month-end, 165,000 tons remained in WIP Inventory (100 percent complete as to material and 40 percent complete as to
conversion).

a. Compute the total units to account for.

Beginning WIP Inventory 180,000

Started into production 3,400,000
Units to account for 3,580,000

b. Determine how many units were started and completed.

Units started (given in the problem) 3,400,000

Units completed= Units to account for less Ending WIP Inventory

Units completed= 3,580,000 - 165,000
Units completed= 3,415,000

c. Determine the equivalent units of production using the FIFO method

Physical inventory Direct material Direct labor Overhead
Beg. WIP 180,000
Started 3,400,000
Units to account for 3,580,000

Completed:
Beg. WIP 180,000 0 63,000 63,000
Started 3,235,000 3,235,000 3,235,000 3,235,000
Ending WIP 165,000 18,300 66,000 66,000
Units accounted for 3,580,000 3,253,300 3,364,000 3,364,000

Final answers:
The equivalent units of production for direct material is 3,253,300.
The equivalent units of production for direct labor is 3,364,000.
The equivalent units of production for overhead is 3,364,000.