The following is information about the Painting Department in the Richardson Fac
ID: 2351512 • Letter: T
Question
The following is information about the Painting Department in the Richardson Factory for the month of June. Richardson Factory uses the FIFO method of inventory costing.Beginning goods in process inventory:
Physical units
5,000
% complete for materials
70%
% complete for labour and overhead
25%
Materials cost from May
$7,350
Labour and overhead cost from May
$3,125
Product started and completed:
Physical units
40,000
Ending goods in process inventory:
Physical units
4,000
% complete for materials
40%
% complete for labour and overhead
10%
Manufacturing costs for June:
Materials
$96,975
Labour and overhead
$79,470
compute equivalent units for direct materials,direct labor and overhead for june.
Explanation / Answer
Equivalent units of materials added to the beginning inventory = (100% - 70%) ? 5,000 physical units = 1,500 equivalent units of materials Equivalent units of labour and overhead added to the beginning inventory = (100% - 25%) ? 5,000 physical units = 3,750 equivalent units of labour and overhead
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