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owip 400units 60%complete
cwip 600units 20%complete
units started 1000
units finished 800
the degree of completion quoted relates to labour and overhead costs. Three quarters of the materials are added at the start of the process and the remaining quarter added when the process is 50% complete. Using fifo method.
the equivalent units of production for materials in the period are.
please explain it to me.The opening WIP was already more than 50% complete and so already had all the materials.
During the period, the number of units both started and finished was 400, so they had full units of materials.
At the end of the period the 600 units WIP were less than 50% complete and therefore only had 75% of the materials. So the equivalent units = 75% x 600 = 450.
So the total equivalent units = 400 + 450 = 850.
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