Determine the equivalent units of production used to compute the unit conversion cost on the cost of production report for Department W. Assume the company uses FIFO.
A) 16,100 units
B) 13,600 units
C) 15,000 units
D) 18,500 units

Question

Quizplus · Accepted Answer

FIFO assumes that the first units put into production are the first units finished. Therefore, the equivalent units of production for conversion costs are equal to the number of units completed and transferred out (13,600 units) plus the equivalent units of production for the ending work in process (2,500 units). The equivalent units of production for the ending work in process are calculated by multiplying the number of units in ending work in process (1,000 units) by the percentage of completion for conversion costs (25%). Therefore, the total equivalent units of production for conversion costs are 13,600 units + 2,500 units = 16,100 units.

Determine the Equivalent Units of Production Used to Compute the Unit