Question

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

• Beginning inventory, 36,000 partially complete gallons.
• Transferred out, 206,000 gallons.
• Ending inventory (materials are 21 percent complete; conversion costs are 12 percent complete).
• Started this month, 240,000 gallons.

Assume that beginning inventory is 50 percent complete with respect to materials and 31 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

Requirement a

	Equivalent Units of Production
Material	202,700

Requirement b

	Equivalent Units of Production
Conversion	203,240

.

leave a comment in case of any confusion or query

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	36,000	50%	31%	50%	69%
Units introduced	240,000
Total units to be accounted for	276,000
Completed and Transferred unit	206,000	0%	0%	100%	100%
Ending WIP	70,000	0%	0%	21%	12%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	36,000	50%	18,000	69%	24,840
From units started/Introduced	170,000	100%	170,000	100%	170,000
Total	206,000		188,000		194,840
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	70,000	21%	14,700	12%	8,400
Total EUP	276,000		202,700		203,240