The following production data were taken from the records of the Finishing Department for June: Determine the number of conversion equivalent units of production in the June 30 Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories.
A) 68,000 units
B) 70,400 units
C) 66,200 units
D) 4,200 units

Question

The following production data were taken from the records of the Finishing Department for June:  Determine the number of conversion equivalent units of production in the June 30 Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories.
A) 68,000 units 
B) 70,400 units 
C) 66,200 units 
D) 4,200 units

Quizplus · Accepted Answer

To calculate the conversion equivalent units of production, we need to add the partially completed units in the June 30 Finishing Department inventory to the fully completed units in the department during June. Under FIFO, we assume that the units in the June 30 inventory are the ones that were started first, so they are considered to be fully completed with respect to conversion costs. Therefore, we only need to add the 68,000 fully completed units from the June production data to arrive at the total conversion equivalent units of production for June. Hence, the answer is A) 68,000 units.

The Following Production Data Were Taken from the Records of the Finishing