Osman Corporation uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places.
-What are the equivalent units for conversion costs for the month in the first processing department?
A) 8,100
B) 560
C) 8,835
D) 10,000

Question

Osman Corporation uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below:  Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places.
-What are the equivalent units for conversion costs for the month in the first processing department?
A) 8,100 
B) 560 
C) 8,835 
D) 10,000

Quizplus · Accepted Answer

The equivalent units for conversion costs are calculated by adding the equivalent units of work done during the period to the equivalent units of work in ending work in process inventory. Using the FIFO method, the equivalent units for conversion costs in the first processing department are 7,460 for units completed and transferred out + 1,375 for ending work in process inventory = 8,835. Therefore, the closest answer choice is C, 8,835.

Osman Corporation Uses the FIFO Method in Its Process Costing