Question

Gaba Corporation uses the FIFO method in its process costing system. The Grinding Department started the month with 17,700 units in its beginning work in process inventory that were 60% complete with respect to conversion costs. An additional 67,000 units were transferred in from the prior department during the month to begin processing in the Grinding Department. During the month 77,000 units were completed in the Grinding Department and transferred to the next processing department. There were 7,700 units in the ending work in process inventory of the Grinding Department that were 10% complete with respect to conversion costs, what were the equivalent units of production for conversion costs in the Grinding Department for the month?

Answer 1

Gaba Corporation :
FIFO method under process costing system…
	Physical unit	%	EUP-conversion
Beginning work in process	17700	40%	7080
Units started and completed	59300	100%	59300
Ending work in process	7700	10%	770
Total	84700		67150
Equivalent unit of production for conversion cost is 67,150
Workings :
Beginning work in process = 17,700 units
77000 units were completed and transferred , it includes the beginning work in process of 17,700 units
Therefore, Units started and completed = 77000-17700 = 59300 units