Question

Clonex Labs, Inc., uses a process costing system. The following data are available for one department for October:

                                                                                                                                Percent Completed

Conversion Units Materials

Work in process, October 1 30,000 65% 30%

Work in process , October 31 15,000 80% 40%

The department started 175,000 units into production during the month and transferred 190,000 completed units to the next department.

Compute the equivalent units of production for October assuming that the company uses the FIFO method of accounting for units and cost.

Answer 1

The equivalent units of production for materials and conversion costs
Clonex Labs, Inc
UNITS		Equivalent Units
	Physical Units	% to complete	Materials	% to complete	Conversion Cost
Units to be accounted for:
Work in process, Oct 1	30,000
Started into production	175,000
Total units	205,000
Units accounted for:
From beginning Work in process	30,000	35%	10,500	70%	21,000
Started and completed (190000-30000)	160,000	100%	160,000	100%	160,000
Units completed and Transferred out	190,000
Work in process, Oct 31	15,000	80%	12,000	40%	6,000
Total Equivalent Units	205,000		182,500		187,000

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