Question

Exercise 3.19 (Algo) Compute Equivalent Units: FIFO Method (LO 8-1, 5) 

Conlon Chemicals manufactures paint thinner Information on the work in process follows: 

• Beginning inventory. 42.000 partially complete gallons 

• Transferred out, 207000 gallons 

• Ending Inventory materials are 19 percent complete conversion costs are 8 percent complete 

• Started this month. 241.000 gallons. 

Assume that beginning inventory is 50 percent complete with respect to materials and 30 percent complete with respect to conversion costs 

Required 

a Compute the equivalent units for materials using FIFO 

b. Compute the equivalent units for conversion costs using FIFO 

Answer 1

Solution:

Computation of Equivalent unit (FIFO)
Particulars	Physical units	Equivalent units
		Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	42000
Units started this period	241000
Total unit to be accounted for	283000
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 50% Conversion - 70%	42000	21000	29400
Started and completed currently	165000	165000	165000
Units in ending WIP Material - 19% Conversion - 8%	76000	14440	6080
Total units accounted for	283000	200440	200480