Irvin Corporation’s Mixing Department began January with 10,000 gallons of product (40 percent completed) in process. During January, Irvin started 100,000 gallons of new product, of which 15,000 gallons remained in ending inventory (70 percent completed).
-Refer to the figure.If materials were added at the beginning of the process,how many equivalent units of production for conversion costs would there be for Irvin using the FIFO costing method?

Question

Quizplus · Accepted Answer

Under the FIFO method, equivalent units for conversion costs are calculated by considering the work needed to complete the beginning inventory, the units started and completed during the period, and the work done on the ending inventory. The calculation is: (10,000 x 60%) + (100,000 - 15,000) + (15,000 x 70%) = 101,500 units.

Irvin Corporation’s Mixing Department Began January with 10,000 Gallons of Product