Sheffield Company has 8000 units in beginning Work in Process Inventory that were 30% complete as to conversion costs, 79000 units completed and transferred out to Finished Goods Inventory, and 2000 units in ending Work in Process Inventory that were 20% complete as to conversion costs. The beginning and ending work in process inventories are fully complete as to materials costs. What are the equivalent units for materials if the FIFO method is used?

Select answer from the options below
79400
 81000
 73000
77000

To determine the equivalent units for materials using the FIFO method, we first need to understand the FIFO process. FIFO (First-In, First-Out) assumes that the work done on beginning inventory is completed first, followed by the work on the units started during the current period.

Here's the step-by-step calculation:

1. **Units Completed and Transferred Out:**  
   All units transferred out are fully complete in terms of materials, which is 79,000 units.

2. **Units in Beginning Inventory:**  
   Since beginning inventory is 100% complete as to materials, no additional material work needs to be accounted for these units under FIFO.

3. **Units Started and Completed:**  
   Units started and completed are the total units completed and transferred out minus the beginning inventory units, which is:
   \[
   \text{Units started and completed} = 79,000 - 8,000 = 71,000 \text{ units}
   \]

   These units are fully complete in terms of materials.

4. **Units in Ending Work in Process Inventory:**  
   Since the ending work in process inventory is fully complete as to materials, all 2,000 units are considered equivalent units for materials.

5. **Equivalent Units Calculation for Materials:**
   \[
   \text{Equivalent units for materials} = 71,000 + 2,000 = 73,000
   \]

So, the correct answer is:

**73,000**

### Correct Answer: 
**73,000**

Would you like more details or have any questions about this calculation?

Here are 5 related questions that expand on the concept:

1. How are conversion costs different from material costs in equivalent units calculation?
2. What is the impact of the percentage completion on equivalent units?
3. How would the equivalent units for materials change if the ending inventory was only 50% complete?
4. What changes when using the Weighted Average method instead of FIFO for equivalent units calculation?
5. How do you calculate equivalent units for conversion costs using FIFO?

**Tip:** Understanding the treatment of beginning and ending inventories is key when calculating equivalent units using FIFO; the focus is on the work done during the current period.

Sheffield Company has 8000 units in beginning Work in Process Inventory that were 30% complete as to conversion costs, 79000 units completed and transferred out to Finished Goods Inventory, and 2000 units in ending Work in Process Inventory that were 20% complete as to conversion costs. The beginning and ending work in process inventories are fully complete as to materials costs. What are the equivalent units for materials if the FIFO method is used?

Learn how to calculate equivalent units for materials using the FIFO method in cost accounting. This example focuses on Sheffield Company, involving 8,000 units in beginning WIP, 79,000 units completed, and 2,000 units in ending WIP. Step-by-step solution provided.

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