Question

Use this information about Department G to answer the question that follow.

Department G had 3,600 units, 40% completed at the beginning of the period, 12,000 units were completed during the period, 2,000 units were 20% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period:

Work in process, beginning of period	$60,000
Costs added during period:
Direct materials (10,400 units at $9.8365)	102,300
Direct labor	79,800
Factory overhead	25,200

Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, determine the equivalent units for direct materials and conversion costs, respectively.

a.10,400 and 10,960

b.10,400 and 10,240

c.14,000 and 12,160

d.14,000 and 13,600

Answer 1

Solution:

Department G
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	3600
Units started this period	10400
Total unit to be accounted for	14000
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 0% Conversion - 60%	3600	0	2160
Started and completed currently	8400	8400	8400
Transferred to finished goods	12000	8400	10560
Units in ending WIP Material - 100% Conversion - 20%	2000	2000	400
Total units accounted for	14000	10400	10960

Hence option a is correct.