Question

Materials are added at the beginning of the production process at Campo Company. Campo uses a FIFO process costing system. The following information on the physical flow of units is available for the month of November:

Beginning work in process (38% complete)	85,000
Started in November	1,024,000
Completed in November and transferred out	951,000
Ending work in process (68% complete)	158,000

Required:

Compute the equivalent units for the conversion cost calculation.

Answer 1

Equivalent units for Conversion =1,026,140

STEP 1
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	85,000	100%	38%	0%	62%
Units introduced	1,024,000
Total units to be accounted for	1,109,000
Completed and Transferred unit	951,000	0%	0%	100%	100%
Ending WIP	158,000	0%	0%	100%	68%

STEP 2
Equivalent Units
	Total Units	Conversion Cost
Units Transferred:		% completed this period	Equivalent Units
From WIP	85,000	62%	52,700
From units started/Introduced	866,000	100%	866,000
Total	951,000		918,700
	Total Units	Conversion Cost
Ending WIP		% completed this period	Equivalent Units
Total	158,000	68%	107,440
Total EUP	1,109,000		1,026,140