Question

Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department:

Units:
Beginning Inventory: 86,000 units, 70% complete as to materials and 25% complete as to conversion.
Units started and completed: 256,000.
Units completed and transferred out: 342,000.
Ending Inventory: 33,000 units, 40% complete as to materials and 10% complete as to conversion.

Costs:
Costs in beginning Work in Process - Direct Materials: $37,200.
Costs in beginning Work in Process - Conversion: $79,700.
Costs incurred in October - Direct Materials: $646,800.
Costs incurred in October - Conversion: $919,300.

Calculate the equivalent units of conversion.

Multiple Choice

• 256,000

• 323,800

• 303,600

• 378,300

• 388,200

Answer 1

Correct answer---- 323,800

STEP 1
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	86,000	70%	25%	30%	75%
Units introduced	2,89,000
Total units to be accounted for	3,75,000
Completed and Transferred unit	3,42,000	0%	0%	100%	100%
Ending WIP	33,000	0%	0%	40%	10%

STEP 2
Equivalent Units
	Total Units	Conversion Cost
Units Transferred:		% completed this period	Equivalent Units
From WIP	86,000	75%	64,500
From units started/Introduced	2,56,000	100%	2,56,000
Total	3,42,000		3,20,500
	Total Units	Conversion Cost
Ending WIP		% completed this period	Equivalent Units
Total	33,000	10%	3,300
Total EUP	3,75,000		3,23,800