2. Beginning work in process inventory is 35% complete for direct materials cost. Ending inventoryis 85% complete for direct materials cost.TotalUnitsDirect MaterialsPercent AddedEUP RSTN Company produces its product in two sequential processing departments. During October, the first process finished andtransferred 295,000 units of its product to the second process. Of these units, 34,000 were in process at the beginning of the monthand 261,000 were started and completed during the month. At month-end, 27,500 units were in process.Compute the number of equivalent units of production for direct materials for the first process for October under each of the followingthree separate assumptions using the FIFO method.1 All direct mast

Answered: 2. Beginning work in process inventory…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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2. Beginning work in process inventory is 35% complete for direct materials cost. Ending inventory
is 85% complete for direct materials cost.
Total
Units
Direct Materials
Percent Added
EUP

RSTN Company produces its product in two sequential processing departments. During October, the first process finished and
transferred 295,000 units of its product to the second process. Of these units, 34,000 were in process at the beginning of the month
and 261,000 were started and completed during the month. At month-end, 27,500 units were in process.
Compute the number of equivalent units of production for direct materials for the first process for October under each of the following
three separate assumptions using the FIFO method.
1 All direct mast

Expert Solution

Step 1: Introducing Equivalents Units Production

EQUIVALENT UNITS OF PRODUCTION

Equivalent Production represents the production of a process in terms of completed units. In other words it means converting the incomplete production units into the equivalent of complete units.

There are two methods for computation of Equivalent Units Production :—

First in First Out
Weighted Average Method

Equivalent units of work-in-progress

= Actual no. of units in process of manufacture x Percentage of work completed

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