1. At the beginning there was no WIP and at the end there was no WIP. You made 10 million clips.

-How many units worth of paper clips did you really do?

- It cost $1 million to do, what was the unit cost per clip?

2. Ok... now let's pretend that you started the 10 million. You didn't finish none. They were all 75% finished.

- How many WHOLE units worth of paper clips did you really do?(equivalent units)

-It cost $1 million to do, what was the unit cost per clip?

3. Now assume that you finished half of the clips. The remaining clips were 50% complete.

- How many units worth of paper clips did you really do? (equivalent units)

- It cost $1 million to do, what was the unit cost per clip?

4. OK. NEW SET OF SCENARIOS. Let's pretend that you started the period with some inventory - 2 million clips that were 40% complete. So, you had to finish them this period. Then you started 10 million more and finished them all.

- How many units worth of paper clips did you do in order to finish the beginning WIP? really do?

-How many units worth of work did you do on the ones you started?

-So how many total equivalent units? (whole units worth of work).

- It cost $1 million to do it all, what was the unit cost per clip?

5. Ok ... same scenario as #4: We finished the 2 million in the beginning WIP, started 10 million more. We didn't finish those. We finished 5 million, and had 5 million left which were 50% complete.

-How many WHOLE units worth of paper clips did you REALLY do in order to finish the beginning WIP? really do?

- How much units worth of work did we do in order to finish the 5 million that we BOTH started AND complete (did both during the period)?

-How many units worth of work (equivalent units) did we do to start the other 5 million that we didn't finish?

- How many equivalent units worth of paper clips did you really do in total?

- It cost $1 million to do it all, what was the unit cost per clip?