Question

Conlon Chemicals manufactures paint thinner. Information on the work in process follows:

• Beginning inventory, 37,000 partially complete gallons.

• Transferred out, 208,000 gallons.

• Ending inventory (materials are 22 percent complete; conversion costs are 9 percent complete).

• Started this month, 235,000 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

Solution:

Conlon Chemicals
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	37000
Units started this period	235000
Total unit to be accounted for	272000
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 50% Conversion - 70%	37000	18500	25900
Started and completed currently	171000	171000	171000
Transferred to finished goods	208000	189500	196900
Units in ending WIP Material - 22% Conversion - 9%	64000	14080	5760
Total units accounted for	272000	203580	202660