Question

Chicotti Company has 6,000 units in beginning work in process, 60% complete as to conversion costs, 75,000 units transferred out to finished goods, and 2,000 units in ending work in process 20% complete as to conversion costs. The beginning and ending inventory is fully complete as to materials costs. How much are equivalent units for conversion costs if the FIFO method is used?

Answer 1

Equivalent units for conversion cost = 71,800 Units

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	6,000	100%	60%	0%	40%
Units introduced	71,000
Total units to be accounted for	77,000
Completed and Transferred unit	75,000	0%	0%	100%	100%
Ending WIP	2,000	0%	0%	100%	20%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	6,000	0%	-	40%	2,400
From units started/Introduced	69,000	100%	69,000	100%	69,000
Total	75,000		69,000		71,400
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	2,000	100%	2,000	20%	400
Total EUP	77,000		71,000		71,800