Jolly Company uses the FIFO method in its process costing system. Beginning stock in the mixing processing center consisted of 4,000 units, 75% complete with respect to conversion costs. Ending work in process stock consisted of 3,000 units, 60% complete with respect to conversion costs. If 12,000 units were transferred to the next processing center during the period, the equivalent units for conversion costs would be

Question

Quizplus · Accepted Answer

The equivalent units for conversion costs using FIFO are calculated as: Units transferred out (12,000) + Ending WIP (3,000 units * 60%) - Beginning WIP (4,000 units * 75%) = 12,000 + 1,800 - 3,000 = 10,800 units.

Jolly Company Uses the FIFO Method in Its Process Costing