Figure 6-10 Julius Corporation's mixing department began January 2014 with 10,000 gallons of product (40 percent completed) in process. During January, Julius started 100,000 gallons of new product, of which 15,000 gallons remained in ending inventory (70 percent completed).
Refer to Figure 6-10. If materials were added at the beginning of the process, how many equivalent units of production for conversion costs would there be for Julius using the FIFO costing method?

Question

Quizplus · Accepted Answer

FIFO method assumes that the first units started are the first units completed and transferred out. Therefore, the equivalent units of production for conversion costs would be the units started during the period (100,000 gallons) plus the units in ending inventory that were started during the period (15,000 gallons * 70% = 10,500 gallons), for a total of 110,500 equivalent units.

Figure 6-10 Julius Corporation's Mixing Department Began January 2014 with 10,000