Question

The following production data were taken from the records of the Finishing Department for July:Inventory in process, June 1, 30% completed 5,000 unitsTransferred to finished goods during June 39,500 unitsEnding work in process during June 25%, completed 4,500 unitsDetermine the total equivalent units for conversion costs, assuming that the first-in, first-out method is used to cost inventories. Assume that all direct materials are placed in process at the beginning of production.

Answer 1

Answer:

Conversion Cost Equivalent units FIFO           39, 125

Explanation:

Beginning WIP           5,000 30% completed

transferred units       39,500

ending WIP                 4,500  25% completed

The equivalent units will be:

the transferred units

- complete portion for the beginning WIP

+ complete portion of the ending WIP

transferred out                      39,500

work in previous period

5,000 x 30% =                         (1,500)

worked but not complete

4,500 x 25% =                          1, 125  

Equivalent units FIFO           39, 125