Richards Corporation uses the FIFO method of process costing.The following information is available for October in its Fabricating Department: Units:
Beginning Inventory: 80,000 units,60% complete as to materials and 20% complete as to conversion.
Units started and completed: 250,000.
Units completed and transferred out: 330,000.
Ending Inventory: 30,000 units,40% complete as to materials and 10% complete as to conversion.
Costs:
Costs in beginning Work in Process - Direct Materials: $37,200.
Costs in beginning Work in Process - Conversion: $79,700.
Costs incurred in October - Direct Materials: $646,800.
Costs incurred in October - Conversion: $919,300.
-Calculate the equivalent units of conversion.
A)250,000
B)317,000
C)294,000
D)333,000
E)342,000

Question

Quizplus · Accepted Answer

To calculate equivalent units of conversion for October, we need to add the units completed and transferred out to the ending inventory, adjusted for the percentage of completion of conversion:

Units completed and transferred out = 330,000
Ending inventory (30,000 * 10%) = 3,000
Equivalent units of conversion = 330,000 + 3,000 = 333,000

Therefore, the correct answer is (B) 317,000.

Richards Corporation Uses the FIFO Method of Process Costing