Muzyka Corporation uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. What are the equivalent units for conversion costs for the month in the first processing department?
A)5,600
B)5,060
C)4,500
D)320

Question

Muzyka Corporation uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below:  Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. What are the equivalent units for conversion costs for the month in the first processing department?
A)5,600 
B)5,060 
C)4,500 
D)320

Quizplus · Accepted Answer

Equivalent units for conversion costs = Units completed and transferred out + (Units in ending work in process inventory × percentage completion)
Units completed and transferred out = 8,000
Units in ending work in process inventory = 2,000
Percentage completion of ending work in process inventory = 60% (given)
Equivalent units for conversion costs = 8,000 + (2,000 × 0.60) = 5,060

Muzyka Corporation Uses the FIFO Method in Its Process Costing