Question

Beginning inventory was partially complete (materials are 100 percent complete; conversion costs are 60 percent complete). Started this month, 59,500 units. Transferred out, 50,600 units. Ending inventory, 18,600 units (materials are 100 percent complete; conversion costs are 17 percent complete). Required: a. Compute the equivalent units for materials using FIFO. b. Compute the equivalent units for conversion costs using FIFO.

Answer 1

FIFO Equivalent Units Materials 12,250

FIFO Equivalent Units Conversion 77,700

Step-by-step explanation:

FIFO assigns costs to the current period units. FIrst In First Out meaning the units first received will be completed first and delivered first.

FIFO Equivalent units can be calculated by the following.

Particulars Units % of Completion Equivalent Units

Mat. Conversion Materials C. Costs

Transferred out, 157,500 100 100 157,500 157,500

+Ending inventory, 52,500 10 20 5250 10,500

- Beginning Inventory 150,500 100 60 150,500 90,300

FIFO Equivalent Units 12,250 77,700

Calculations:

Ending Inventory= Opening + Started - Transferred Out

Ending Inventory=30,000 +180,000 -157,500 = 52,500 gallons

Beginning Inventory = Transferred Out + Ending Units- Units Started

Beginning Inventory = 157,500+ 52,500-59,500= 150,500