Question

Conlon Chemicals manufactures paint thinner. Information on the work in process follows: Beginning inventory, 30,000 partially complete gallons. Transferred out, 157,500 gallons. Ending inventory (materials are 10 percent complete; conversion costs are 20 percent complete). Started this month, 180,000 gallons. Assume that beginning inventory is 50 percent complete with respect to materials and 30 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

a. 147,750 units

b. 159,000 units

Step-by-step explanation:

The computation is shown below:

a. Equivalent unit of material is

= (30,000 units × 50% + 127,500 units × 100% + 52,500 units ×10%)

= 147,750 units

And,

b) Equivalent unit of conversion is

= (30,000 units ×70% + 127,500 units × 100% + 52,500 units × 20%)

= 159,000 units

The 127,500 units is come from

= 157,500 units - 30,000 units

= 127,500 units

And, the 52,500 units is come from

= 180,000 units - 127,500 units

= 52,500 units