The following production data were taken from the records of the Finishing Department for July: Inventory in process, July 1, 30% completed Transferred to finished goods during July Ending work in process during July, 40% completed 5,000 units 40,500 units 4,000 units Determine 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. a. 40,600 units Ob. 40,500 units O c. 39,500 units Od. 44,500 units

Question

Braggs

Business

11 May, 19:56

The following production data were taken from the records of the Finishing Department for July: Inventory in process, July 1, 30% completed Transferred to finished goods during July Ending work in process during July, 40% completed 5,000 units 40,500 units 4,000 units Determine 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. a. 40,600 units Ob. 40,500 units O c. 39,500 units Od. 44,500 units

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Makena Sanders · Answer 1

a. 40,600 units

Explanation:

For computing the equivalent units for conversion costs, first we have to compute the started and completed units which is shown below:

= Transferred units - beginning work in progress units

= 40,500 units - 5,000 units

= 35,500 units

Now, the computation of the equivalent units for conversion costs would be

= Beginning work in process inventory units * remaining percentage + units started and completed * percentage of completion + ending work in process inventory units * percentage of completion

= 5,000 units * 70% + 35,500 units * 100% + 4,000 units * 40%

= 3,500 units + 35,500 units + 1,600 units

= 40,600 units