Question

Department M had 2,200 units 54% completed in process at the beginning of June, 11,100 units completed during June, and 1,300 units 29% completed at the end of June. The number of equivalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories is a.11,477 units b.12,777 units c.10,289 units d.8,900 units

Answer 1

10,289 units

Step-by-step explanation:

The equivalent units of production under FIFO method means the units that are being worked on during the year. Hence this is the reason why in calculating the unit costs we only consider current period costs and not beginning inventory costs.

Calculation of Equivalent units of Production for conversion costs

To finish Opening Work In Process ( 2,200 × 46%) = 1,012

Started and Completed during the year (11,100 - 2,200) × 100 % = 8,900

Closing Work In Process (1,300 × 29%) = 377

Equivalent units of Production for conversion costs = 10,289