Question

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

• Beginning inventory, 39,000 partially complete gallons.

• Transferred out, 212,000 gallons.

• Ending inventory (materials are 21 percent complete; conversion costs are 12 percent complete).

• Started this month, 241,000 gallons.

Assume that beginning inventory is 50 percent complete with respect to materials and 32 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

	Equivalent Units of Production
Material	206,780
Conversion	207,680

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed	% completed this period
	Material	Conversion	Material	Conversion
Beginning WIP	39,000	50%	32%	50%	68%
Units introduced	241,000
Total units to be accounted for	280,000
Completed and Transferred unit	212,000	0%	0%	100%	100%
Ending WIP	68,000	0%	0%	21%	12%

.

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material	Conversion
Units Transferred:	% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	39,000	50%	19,500	68%	26,520
From units started/Introduced	173,000	100%	173,000	100%	173,000
Total	212,000		192,500		199,520
	Total Units	Material	Conversion
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	68,000	21%	14,280	12%	8,160
Total EUP	280,000		206,780		207,680