BBC Corporation manufactures snowboards using a two-department process. Direct materials are added in both the Assembly and Shaping Departments at the beginning of the process. Conversion costs are applied uniformly throughout the process. Data for the Shaping Department for the month of March follows:

-Assuming BBC uses the FIFO method, what were the equivalent units of production for conversion costs?

Question

BBC Corporation manufactures snowboards using a two-department process. Direct materials are added in both the Assembly and Shaping Departments at the beginning of the process. Conversion costs are applied uniformly throughout the process. Data for the Shaping Department for the month of March follows:
 
-Assuming BBC uses the FIFO method, what were the equivalent units of production for conversion costs?

Quizplus · Accepted Answer

The equivalent units of production for conversion costs under the FIFO method are calculated based on the work done during the current period only. This includes finishing the work on units that were partially completed at the beginning of the period and the work done on units started and completed during the period, as well as the work done on any units that were started during the period but remain incomplete at the end. The correct answer, 41,950, suggests it was calculated by taking into account these factors specific to the FIFO method.

BBC Corporation Manufactures Snowboards Using a Two-Department Process