Stryker Industries produces stethoscopes made from steel and rubber that begin in the molding department before being to the assembly department. After the products have been assembled, they are packaged and shipped to customers across the country. The following production information has been gathered for the month of June:
Using the First-In, First-Out (FIFO) method, calculate the equivalent units of production for Transferred-In (TI), Direct Materials (DM), and Conversion Costs (CC) during the month of June. (Round units to nearest whole number.)

Question

Stryker Industries produces stethoscopes made from steel and rubber that begin in the molding department before being to the assembly department. After the products have been assembled, they are packaged and shipped to customers across the country. The following production information has been gathered for the month of June:
 Using the First-In, First-Out (FIFO) method, calculate the equivalent units of production for Transferred-In (TI), Direct Materials (DM), and Conversion Costs (CC) during the month of June. (Round units to nearest whole number.)

Quizplus · Accepted Answer

In this question, the equivalent units of production will need to be calculated for three different cost categories using the FIFO method. In this method, the beginning inventory will need a separate evaluation unlike with the Weighted-Average method. For Direct Materials and Transferred-In costs, this will be equal to (Units in Beginning Work-in-Progress (WIP) Inventory Completed this Period × Percentage of Costs Added) + (Units Transferred-In and Completed this Period × Percentage of Costs Added) + (Units in Ending WIP Inventory × Percentage of Costs Added) = (993 units × 0%) + (6,456 units × 100%) + (1,004 units × 100%) = 0 + 6,456 units + 1,004 units = 7,460 units. For Conversion Costs, this will be equal to (Units in Beginning WIP Inventory Completed this Period × Percentage of Costs Added) + (Units Transferred-In and Completed this Period × Percentage of Costs Added) + (Units in Ending WIP Inventory × Percentage of Costs Added) = (993 units × 52%) + (6,456 units × 100%) + (1,004 units × 32%) = 516 units + 6,456 units + 321 units = 7,293 units.

Stryker Industries Produces Stethoscopes Made from Steel and Rubber That