Can anyone tell me the correct formula for determining Equivalent units of Production for FIFO?
I did a problem the Becker way on a Wiley Test Bank question and got it wrong.
Here's the question:
During the current year, the following manufacturing activity took place for a company’s products:
Beginning work in process 70% complete
10,000 units
Units started into production during the year
150,000 units
Units completed during the year
140,000 units
Ending work in process 25% complete
20,000 units
What was the number of equivalent units produced using the first-in, first-out method?
If I do this the Becker way this is what I come up with:
Wip Beginning (10,000*.7).............................7,000
Completed and Xferred out.....140,000
Units in Beginning Inventory...(10,000)........130,000
End WIP (20,000*.25)...................................5,000
Equiv. Units of Production.........................142,000
Answer from Wiley was wrong, in fact, it wasn't even one of the options. The correct answer was 138,000 and the explanation was unclear and the online book seems to go into unnecessary detail. So, is Becker wrong or am I way off on my calculations? How is Wiley coming up with this number? Please let me know. Equivalent Units questions are so easy that they are like getting free points on the exam, at least that's what I thought until now.