A factory transferred 8,800 completed units during its second period of operations

Accounting Jan 31, 2021

A factory transferred 8,800 completed units during its second period of operations. At the beginning of the period, 400 units were 75% complete. At the end of the period, 800 units were 50% complete. Assume the FIFO costing method is used. The equivalent production for the period was a. 9,000 units. b. 8.900 units. c. 8.800 units. d. 8.700 units. (CIA, adapted)

Expert Solution

Computation of Equivalent production:

Equivalent production = Beginning WIP + Started and Complete + Ending WIP

= 400 * 25% + (8800-400)*100% + 800 * 50%

= 8900 units

So, the correct option is B "8,900 units".

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