Department R had 5,000 units in work in process that were 75% completed as to labor and overhead at the beginning of the period, 30,000 units of direct materials were added during the period, 32,000 units were completed during the period, and 3,000 units were 40% 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) 32,450
B) 29,450
C) 31,950
D) 26,000

Question

Quizplus · Accepted Answer

The equivalent units for conversion costs are calculated by considering the work needed to complete the beginning inventory, the units started and completed during the period, and the work done on the ending inventory. Using FIFO, the calculation is: (5,000 units x 25% to complete) + (27,000 units started and completed) + (3,000 units x 40% complete) = 29,450 equivalent units.

Department R Had 5,000 Units in Work in Process That