Requirement 1:
To compute:
The roasting department's equivalent units of production for materials for the month using FIFO method.
Requirement 1:

Answer to Problem 21QS
Solution:
Materials | |
Equivalent Units | 18,000 units |
Explanation of Solution
The equivalent units of production for Materials can be calculated as under −
First, units added and completed 100 % from the process will be calculated.
Given,
- Units transferred out = 17,000 units ( 2,000 units + 18,000 units − 3,000 units)
- Beginning inventory units = 2,000 units
Out of total units transferred, 15,000 units were added and completed and transferred out during the process.
Equivalent
Equivalent units of production -FIFO | |
Direct Materials | |
Units to complete - Beginning Inventory | |
Direct Materials (2,000 X 30%) | 600 |
Units completed and transferred out | 15,000 |
Units completed - Ending Inventory | |
Direct Materials (3,000 X 80%) | 2,400 |
Equivalent units of production | 18,000 |
The above calculations can be explained as under −
For beginning inventory −
Given,
- Units in beginning inventory = 2,000 units
- For direct material completed percentage = 70 %
For units added, completed and transferred out −
15,000 units calculated as above
For ending inventory −
Given,
- Units in ending inventory = 3,000 units
- For direct material completed percentage = 80 %
Equivalent units for ending inventory for materials −
Total equivalent units for production for materials will be calculated as under −
Given,
For materials −
- Beginning equivalent units = 600 units
- Completed and transferred = 15,000 units
- Ending equivalent units = 2,400 units
Thus, the roasting department's equivalent units of production for materials for the month using FIFO method have been calculated.
Requirement 2:
To compute:
The roasting department's cost per equivalent unit of production for materials for the month using FIFO method.
Requirement 2:

Answer to Problem 21QS
Solution:
The roasting department's cost per equivalent unit of production for materials for the month using FIFO method = $ 1.55 per unit
Explanation of Solution
The cost per equivalent unit for materials is calculated as under −
Cost per Equivalent unit - FIFO | |
Direct Materials | |
Costs incurred during the period | 27,900 |
Equivalent units of production | 18,000 |
Cost per Equivalent unit | 1.55 |
Given,
For materials −
- Costs incurred during the period = $ 27,900
- Equivalent units of production = 18,000 units
Thus, the roasting department's cost per equivalent unit of production for materials for the month using FIFO method has been calculated.
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Chapter 20 Solutions
FUNDAMENTAL ACCOUNTING PRINCIPLES
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