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Conlon Chemicals manufactures paint thinner
Conlon Chemicals manufactures paint thinner. Information on the work in process follows:
Beginning inventory, 41,000 partially complete gallons.
Transferred out, 206,000 gallons.
Ending inventory (materials are 20 percent complete; conversion costs are 9 percent complete).
Started this month, 244,000 gallons.
Assume that beginning inventory is 50 percent complete with respect to materials and 31 percent complete with respect to conversion costs
Required:
a. Compute the equivalent units for materials using FIFO.
b. Compute the equivalent units for conversion costs using FIFO.
Expert Solution
a. Calculation of equivalent units using FIFO Method:
| Particular | Equivalent |
| Opening Inventory | 20500 |
| Add: Started and Completed during the period | 165000 |
| Add: Ending Inventory | 15800 |
| Equivalent units for material | 201300 |
Working note:
Calculation for opening Inventory.
=50100×41000=20500=50100×41000=20500
Calculation for started and completed units:
=206000−41000=165000=206000−41000=165000
Calculation for ending inventory:
=[(41000+244000)−206000]×20100=(285000−206000)×20100=79000×20100=15800=[(41000+244000)−206000]×20100=(285000−206000)×20100=79000×20100=15800
b. Calculation of equivalent units for conversion using FIFO Method:
| Particular | Equivalent |
| Opening Inventory | 127100 |
| Add: Started and Completed during the period | 165000 |
| Add: Ending Inventory | 7110 |
| Equivalent units for material | 299210 |
Calculation for opening Inventory.
=31100×41000=12710=31100×41000=12710
Calculation for started and completed units:
=206000−41000=165000=206000−41000=165000
Calculation for ending inventory:
=[(41000+244000)−206000]×9100=(285000−206000)×9100=79000×9100=7110
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