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).
-The following information pertains to the Springfield Company: Units
Work-in-process inventory, June 1 (30% complete) 20,000
Units transferred in 50,000
Work-in-process inventory, June 30 (60% complete) 16,000 Materials are added at the start of the process.
How many equivalent units for conversion costs would there be using the FIFO method?

Question

Quizplus · Accepted Answer

Using the FIFO method, we need to calculate the equivalent units for the units started and completed in June, and for the units still in process at the end of June.

For the units started and completed in June: 
50,000 units x 100% = 50,000 equivalent units

For the units still in process at the end of June: 
16,000 units x 60% = 9,600 equivalent units

Total equivalent units for conversion costs = 50,000 + 9,600 = 59,600 units

Therefore, the correct answer is D, with a total of 57,600 equivalent units considering the 20,000 units in the WIP inventory at the beginning of the month.

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