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Conlon Chem
Conlon Chem.. manufactures paint thInner. Informal]. on tme wok In process follows)
• Beginning inventory, 44,000 partially complete gallons. • Transferred out, 206,000 gallons. • Ending Inventory (materials are 21 percent complete) canyenslan costs are 11 percent complete). • Started this mond), 236,000 gallons.
Assume that begInning Inventory Is 50 percent complete with respect to materials and 32 percent complete with respect to conversion costs
Required: a. Compute the equivalent units for materials using FIFO.
Equivebnt u
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b. Compute the equwalent units for conversion costs using FIFO.
Expert Solution
Computation of Equivalent Units of Material using FIFO:
Equivalent Units = (Beginning Inventory * Percentage completed in the current period) + (Units completed - Beginning inventory) + (Ending inventory * Percentage completed)
Here,
Ending Inventory = 44,000 + 236,000 - 206,000 = 74,000
Equivalent Units = (44,000*50%)+(206,000-44,000)+(74,000*21%)
= 22,000+162,000+15,540
Equivalent Units = 199,540
Computation of Equivalent Units of Conversion Costs using FIFO:
Equivalent Units = (Beginning Inventory * Percentage completed in the current period) + (Units completed - Beginning inventory) + (Ending inventory * Percentage completed)
= (44,000 *(1-32%)) + (206,000 - 44,000) + (74,000 * 11%)
= 29,920 + 162,000+8,140
Equivalent Units = 200,060
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