Question

The following data pertain to a company's cracking-department operations in December:

Units
Completion
Work-in-process, December 1
20,000
50%
Units started
170,000
Units completed and transferred to the distilling department
180,000
Work-in-process, December 31
10,000
50%
Materials are added at the beginning of the process, and conversion costs are incurred uniformly throughout the process. Assuming use of the FIFO method of process costing, the equivalent units of production (EUP) with respect to conversion performed during December were
A 175,000
B 185,000
C 170,000
D 180,000

Answer 1

Answer:

B 185,000

Explanation:

Equivalent Units of Production

=Work-in-process December 1 (20,000  *50% = 10,000) + Units started(  170,000) + Work-in-process, December 31  (10,000  *50%= 5,000)

Equivalent Units of Production  for conversion costs = 10,000 + 170,000 + 5000

Equivalent Units of Production  for conversion costs for  December = 185,000

As FIFO Method of inventory is used first the beginning WIP is completed then units started and at the ending WIP.