Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 94,000 units, 80% complete as to materials and 25% complete as to conversion. Units started and completed: 264,000. Units completed and transferred out: 358,000. Ending Inventory: 37,000 units, 40% complete as to materials and 15% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700. Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300. Calculate the equivalent units of conversion.

Question

Annika Dyer

Business

14 August, 02:43

Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 94,000 units, 80% complete as to materials and 25% complete as to conversion. Units started and completed: 264,000. Units completed and transferred out: 358,000. Ending Inventory: 37,000 units, 40% complete as to materials and 15% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700. Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300. Calculate the equivalent units of conversion.

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Answers (1)

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Rachel Cooke · Answer 1

total equivalent untis for conversion 340.050‬

Explanation:

Calculate the equivalent units of conversion.

transferred - out 358,000

beginning WIP 94,000 x 25% = (23,500)

ending WIP 37,000 x 15% = 5,550

total equivalent untis for conversion 340.050‬

notes:

Under FIFO method we calcualte the cost for the equivalent units worked this month, we must subteract the beginning WIP inventory.