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I couldn’t find this question on the forum. Sorry if I am duplicating posts. Can you help with that please?
The following data relate to process for last month:
Opening inventory 200 units (70% complete)
Completed ouput 2650 units
Closing inventory 500 units (40% complete)What were the equivalent units of production last month?
My Answer: 70% of 200 = 140 = Opening Inventory
40% of 500 = 200 = Closing Inventory2650 = Sold
Production = 2710
Correct Answer should be 2910. Can you explain it to me, please?
This one is our mistake – I do apologise 🙁
Your answer is correct and it has now been corrected in the exam.
Glad to know I got it right!!!
Thank you very much for your patience answering all these questions!
what concept they ask for?
opening inventory- 200 ( 70% complete) = 60 units
completed output- =2650 units
Closing inventory 500units ( 40% complete)=200untis
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2910 unitsBut barbara calculate the opening to be 140units, if that the opening the answer would be 2990 units. so which is correct?
The completed output of 2650 units includes the 200 that were in progress at the start of the period. So only 2450 were completed in full.
The equivalent units this period are therefore:
Finish the WIP brought forward: 200 x 30% = 60
Started and finished this period = 2450
Start the WIP carried forward: 500 x 40% = 200So the total equivalent units = 60 + 2450 + 200 = 2710
Sir, in the above question nothing is mentioned about the method it is using to calculate the EU. So, why are we assuming FIFO?
We are not assuming FIFO.
FIFO and weighted average only become relevant if we are asked to do the costings.This question does not ask for any costings. It asks for the equivalent units of production this month and the work done this month is as is in my answer.
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