Question

Pierce & Company provides the following information concerning the work in process at its plant:

• Beginning inventory was partially complete (materials are 100 percent complete; conversion costs are 61 percent complete).

• Started this month, 59,300 units.

• Transferred out, 50,200 units.

• Ending inventory, 18,700 units (materials are 100 percent complete; conversion costs are 15 percent complete).

Required:

a. Compute the equivalent units for materials using FIFO.

b. Compute the equivalent units for conversion costs using FIFO.

Answer 1

Solution

Equivalent units for materials using FIFO= 59,300

Equivalent units for conversion costs using FIFO = 47,149

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	9,600	100%	61%	0%	39%
Units introduced	59,300
Total units to be accounted for	68,900
Completed and Transferred unit	50,200	0%	0%	100%	100%
Ending WIP	18,700	0%	0%	100%	15%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	9,600	0%	-	39%	3,744
From units started/Introduced	40,600	100%	40,600	100%	40,600
Total	50,200		40,600		44,344
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	18,700	100%	18,700	15%	2,805
Total EUP	68,900		59,300		47,149