(CMA)The accountant for Whirly Manufacturing Inc. gathered the following information for the month of November: Beginning WIP 16,000 units
Started production 100,000
Completed production 92,000
Ending WIP 24,000
The beginning inventory was 60% complete for materials and 20% complete for conversion costs. The ending inventory was 90% complete for materials and 40% complete for conversion costs.
Costs pertaining to the month of November are as follows:
Beginning inventory costs are:
Materials $54,560
Direct labour 20,320
Factory overhead 15,240
Costs incurred during November include:
Materials $468,000
Direct labour 182,880
Factory overhead 391,160
Using the FIFO method, the equivalent units of production for conversion costs are:

Question

Quizplus · Accepted Answer

To calculate equivalent units for conversion costs using FIFO method, we need to first calculate the equivalent units for units completed and transferred out and equivalent units for ending work in process separately.

Equivalent units for units completed and transferred out:

Direct materials:
92,000 completed units + (24,000 x 90%) = 113,600 equivalent units.

Conversion costs:
92,000 completed units + (24,000 x 40%) = 102,400 equivalent units.

Equivalent units for ending work in process:

Direct materials:
24,000 x 10% = 2,400 equivalent units.

Conversion costs:
24,000 x 60% = 14,400 equivalent units.

Total equivalent units for conversion costs = Equivalent units for units completed and transferred out + Equivalent units for ending work in process
= 102,400 + 14,400
= 98,400 units.

Therefore, the answer is C) 98,400 units.

(CMA)The Accountant for Whirly Manufacturing Inc