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11 April, 01:46

g Salmont Corporation uses the FIFO method in its process costing system. The company reported 28,000 equivalent units of production for materials last month. The company's beginning work in process inventory consisted of 7,500 units, 40% complete with respect to materials. The ending work in process inventory consisted of 5,500 units, 70% complete with respect to materials. The number of units started during the month was:

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  1. 11 April, 02:02
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    25,150 units

    Explanation:

    The question is to determine the number of production units that were started during the month.

    Note that the company uses the First In First Out method for Process costing

    Description Units in Process completion (%) Equivalent

    completed (units)

    The Equivalent Units 28,000 100 28,000

    Subtract:

    Opening Work-in - progress 7,500 60 4,500

    Closing Work in Progress 5,500 70 3,850

    Equivalent Units Started and Completed 19,650

    Step 2: Equivalent Units Started

    = Eqivalent Units started and completed + Total Ending Units

    = 19,650 + 5,500 = 25,150 units
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