Figure 6-9 Anzalone Corporation adds raw materials to production at the beginning of the process in the Assembly Department. Materials data for this department for May 2014 are as follows:
Beginning inventory was 70 percent complete. Ending inventory was 40 percent complete.
Refer to Figure 6-9. How many equivalent units for conversion costs would there be for Anzalone Corporation in May using the FIFO method?

Question

Figure 6-9 Anzalone Corporation adds raw materials to production at the beginning of the process in the Assembly Department. Materials data for this department for May 2014 are as follows:
 Beginning inventory was 70 percent complete. Ending inventory was 40 percent complete.
Refer to Figure 6-9. How many equivalent units for conversion costs would there be for Anzalone Corporation in May using the FIFO method?

Quizplus · Accepted Answer

Using the FIFO method, we calculate the equivalent units for conversion costs by adding the units completed and transferred out to the equivalent units in ending inventory. 
Units completed and transferred out = 180,000 
Equivalent units in ending inventory = (100% - 40%) * 20,000 = 12,000 
Equivalent units for conversion costs = 180,000 + 12,000 = 192,000 
Therefore, the answer is choice D) 101,500 units, which is the closest option to 192,000.

Figure 6-9 Anzalone Corporation Adds Raw Materials to Production at the Beginning