Figure 6-10
Julius Corporation's mixing department began January 2016 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. Therefore, the equivalent units of production for conversion costs would be the 10,000 gallons in beginning inventory (40% completed) plus the 85,000 gallons started and completed during January (100,000 gallons started - 15,000 gallons in ending inventory). This totals 101,500 equivalent units of production for conversion costs.

Figure 6-10 Julius Corporation's Mixing Department Began January 2016 with 10,000 Gallons