Question

Department M had 2,000 units 51% completed in process at the beginning of June, 11,500 units completed during June, and 1,500 units 30% completed at the end of June. The number of equlvalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories is

a. 9,500 units
b. 13,450 unit
c. 10,930 unit
d. 11,950 unit

Answer 1

The number of equivalent units of production for conversion costs for June, using the FIFO method to cost inventories, is 12,970 units.

Step-by-step explanation:

The number of equivalent units of production for conversion costs for June, using the first-in, first-out (FIFO) method to cost inventories, can be calculated as follows:

1. Calculate the equivalent units of production for the units completed during June: 11,500 units * 100% = 11,500 units.
2. Calculate the equivalent units of production for the units in process at the beginning of June: 2,000 units * 51% = 1,020 units.
3. Add the equivalent units of production for the units completed during June and the units in process at the beginning of June: 11,500 units + 1,020 units = 12,520 units.
4. Calculate the equivalent units of production for the units in process at the end of June: 1,500 units * 30% = 450 units.
5. Add the equivalent units of production for the units in process at the end of June to the previous total: 12,520 units + 450 units = 12,970 units.

Therefore, the number of equivalent units of production for conversion costs for June, using the first-in, first-out (FIFO) method to cost inventories, is 12,970 units. Therefore, option d. 11,950 units is incorrect.