Kalyan Corporation uses the FIFO method in its process costing system.Operating data for the Enameling Department for the month of May appear below: What were the equivalent units of production for conversion costs in the Enameling Department for May?

Question

Kalyan Corporation uses the FIFO method in its process costing system.Operating data for the Enameling Department for the month of May appear below:  What were the equivalent units of production for conversion costs in the Enameling Department for May?

Quizplus · Accepted Answer

To calculate the equivalent units of production for conversion costs, we need to consider the partially completed units in the production process as well.

From the operating data, we can see that 75,000 units were started and completed in May, and there were 2,200 units in ending Work in Process (WIP) inventory that were 100% complete for materials and 60% complete for conversion costs.

Therefore, the equivalent units of production for conversion costs can be calculated as follows:

Equivalent units of production for conversion costs = completed units + (ending WIP units * % complete for conversion costs)
= 75,000 + (2,200 * 60%)
= 75,000 + 1,320
= 56,980

Hence, the best choice is C. FIFO method
Units started and completed during the period = Units started into production during the period - Units in ending work in process inventory = 58,000 - 6,600 = 51,400 11ea7998_5e70_5062_911b_15d535609c67_TB2627_00_TB2627_00

Kalyan Corporation Uses the FIFO Method in Its Process Costing