Holly Company has the following information for December 1 to December 31. All direct materials are 100% complete.

Work-in-Process
Beginning balance December 340 units, 20% complete for conversion	$ 42,500	Completed 940 units and transferred to finished goods inventory	$ 206,293
Direct materials	91,800
Direct labor	57,800
Factory overhead
Property taxes	8,800
Depreciation	39,000
Utilities	20,800
Indirect labor	6,800
Ending balance December 31, 440 units, 40% complete	61,207

Required:

1. Calculate equivalent units using the weighted-average and FIFO methods.

2. Use the given information to determine whether Holly Company is using the FIFO or weighted-average method. The beginning balance of Work-in-Process (WIP) consists of $30,551 of direct materials and $11,949 of conversion costs.

multiple choice

• Weighted-average method

• FIFO method