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.

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Business

Genesis Chandler

11 November, 06:12

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.

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Bernard Middleton · Answer 1

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