Question

Department R had 4,400 units in work in process that were 80% completed as to labor and overhead at the beginning of the period; 38,000 units of direct materials were added during the period; 40,300 units were completed during the period; and 2,100 units were 30% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. The number of equivalent units of production for conversion costs for the period was:

a. 37,410

b. 46,800

c. 40,300

d. 41,810

Answer 1

Department R

Equivalent Units of Production for Conversion Costs (under FIFO method)

Particulars	Whole Unit	%	Equivalent unit
Beginning work in progress	4,400	20 %	880
Unit started and completed (Working Note - 1)	35,900	100 %	35,900
Ending work in progress	2,100	30%	630
Equivalent units of production for conversion costs			37,410

Equivalent units of production for conversion costs under FIFO method 37,410. So the answer is " a "37,410

Working Note :– 1 == Units Started and completed

Units completed during the period   = 40,300 units (A)

Beginning work in progress               = 4,400 units (B)

Units Started and completed = (A) – (B)

= 40,300 units – 4,400 units = 35,900 units