Question

1.

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

• Beginning inventory, 41,000 partially complete gallons.
• Transferred out, 211,000 gallons.
• Ending inventory (materials are 21 percent complete; conversion costs are 10 percent complete).
• Started this month, 241,000 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

Solution

Requirement a and b

	Material	Conversion
Equivalent Units of Production	205,410	205,390

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	41,000	50%	31%	50%	69%
Units introduced	241,000
Total units to be accounted for	282,000
Completed and Transferred unit	211,000	0%	0%	100%	100%
Ending WIP	71,000	0%	0%	21%	10%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	41,000	50%	20,500	69%	28,290
From units started/Introduced	170,000	100%	170,000	100%	170,000
Total	211,000		190,500		198,290
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	71,000	21%	14,910	10%	7,100
Total EUP	282,000		205,410		205,390