Winkle Company uses the FIFO method in its process costing system. At the beginning of March, the work in process inventory in the Blending Processing Center consisted of 5,000 units, 90% complete with respect to conversion costs. At the end of the month, the work in process inventory consisted of 2,000 units that were 60% complete with respect to conversion costs. If 10,000 units were transferred to the next processing center during the month, the equivalent units for conversion costs were:
A) 6,700 units
B) 11,700 units
C) 10,300 units
D) 13,000 units

Question

Quizplus · Accepted Answer

The equivalent units for conversion costs are calculated as follows:Beginning work in process inventory: 5,000 units x 90% = 4,500 equivalent unitsUnits transferred out: 10,000 units x 100% = 10,000 equivalent unitsEnding work in process inventory: 2,000 units x 60% = 1,200 equivalent unitsTotal equivalent units for conversion costs = 4,500 + 10,000 + 1,200 = 15,700 equivalent units

Winkle Company Uses the FIFO Method in Its Process Costing