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      Question

      Using FIFO method, find equivalent units for labour for

      current period only, from the following information: Opening WIP: 300 units (60% complete for labour), Units introduced: 1,200, Closing WIP: 400 units (40% complete for labour), Units completed & transferred: 1,100 units.
      A 1,040 Correct Answer Incorrect Answer
      B 1,340 Correct Answer Incorrect Answer
      C 940 Correct Answer Incorrect Answer
      D 1,060 Correct Answer Incorrect Answer
      E 1,100 Correct Answer Incorrect Answer

      Solution

      FIFO for labour means, the opening WIP will be completed first.   ·        Completion of opening WIP = 300 × (100% − 60%) = 120 ·        Units started & completed = units completed and transferred – Opening WIP = (1,100 − 300) × 100% = 800 ·        Closing WIP = 400 × 40% = 160   Total equivalent units = 120 + 800 + 160 = 1,040

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