Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: Using the FIFO method, the number of equivalent units of conversion costs was

Question

Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities:  Using the FIFO method, the number of equivalent units of conversion costs was

Quizplus · Accepted Answer

Using FIFO method:
- Units transferred out: 24,100
- Ending WIP: 4,000 units (40% complete for conversion costs)
Equivalent units of conversion costs:
- Completed units: 24,100 units
- Ending WIP: 4,000 units x 40% = 1,600 units
Total equivalent units of conversion costs = 24,100 + 1,600 = 25,700
Therefore, the correct answer is B) 14,380.