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RideAnS [48]
3 years ago
11

Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Here is information ab

out July's activities: On July 1: Beginning inventories 850 units, 60% complete Direct materials cost $5,000 Conversion costs $4,000 During July: Number of units started 15,000 Direct materials added $155,000 Conversion costs added $83,520 On July 31: Ending inventories 1,600 units, 40% complete Using the FIFO method, the number of equivalent units of conversion costs was:
Business
1 answer:
ziro4ka [17]3 years ago
6 0

Answer:

Equivalent Units                   14,380

Explanation:

Beginning units 850 x (1-.6) =   340

Started Units during July     15,000

Ending Inventory 1,600(1-.4)    (960)

Equivalent Units                   14,380

<u>Reasoning</u>

We have to complete the beginning WIP which are laking 40% (1-0.6)

We start doing 15,000 units.

We left 1,600 units at 60% undone (1-0.4)

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