(Appendix 4A)Carson Company uses the FIFO method in its process costing system.The Assembly Department started the month with 6,000 units in its beginning work-in-process inventory; 20% of the units were complete with respect to conversion costs.An additional 74,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department.Of the 8,000 units in the ending work-in-process inventory of the Assembly Department,60% were complete with respect to conversion costs. What were the equivalent units of production for conversion costs in the Assembly Department for the month?
A) 72,000 units.
B) 75,600 units.
C) 76,000 units.
D) 76,800 units.

Question

Quizplus · Accepted Answer

The equivalent units of production for conversion costs are calculated as follows: - Units completed and transferred out: 72,000 units (80,000 total units - 8,000 ending WIP)- Equivalent units in ending WIP: 8,000 units * 60% = 4,800 units- Total equivalent units for conversion costs = 72,000 + 4,800 = 76,800 units. However, since the beginning WIP was 20% complete, we need to subtract the equivalent units already completed in beginning WIP: 6,000 units * 20% = 1,200 units.Thus, 76,800 - 1,200 = 75,600 units.

(Appendix 4A)Carson Company Uses the FIFO Method in Its Process