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During the current year, the following manufacturing activity took place for a company's products. The beginning work in process, 70% complete, was comprised of 10,000 units. Units started into production during the year totaled 150,000 units. A total of 140,000 units were completed during the year. The ending work in process, 25% complete, was comprised of 20,000 units. What was the number of equivalent units using the FIFO method?
a. 138,000.
b. 140,000.
c. 145,000.
d. 150,000.

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Answer:

a. 138,000

Explanation:

                      Equivalent Units of Production (FIFO method)

                                                                   Whole   % Completion  Equ. units

                                                                   Units                                Dir. Mat.

Beg. Work in process (100% - 70%)    10,000            30%            3,000

Started & completed (140,000-10,000)  130,000         100%           130,000

Ending Work in process                           20,000           25%            5,000

Total Equivalent units                                                                        138,000

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