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Richards Corporation uses the FIFO method of process costing. The following information is available for October...

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Accounting

Richards Corporation uses the FIFO method of process costing.The following information is available for October in itsFabricating Department:

Units:
Beginning Inventory: 86,000 units, 70% complete as to materials and25% complete as to conversion.
Units started and completed: 256,000.
Units completed and transferred out: 342,000.
Ending Inventory: 33,000 units, 40% complete as to materials and10% complete as to conversion.

Costs:
Costs in beginning Work in Process - Direct Materials:$37,200.
Costs in beginning Work in Process - Conversion: $79,700.
Costs incurred in October - Direct Materials: $646,800.
Costs incurred in October - Conversion: $919,300.

Calculate the equivalent units of conversion.

Multiple Choice

  • 256,000

  • 323,800

  • 303,600

  • 378,300

  • 388,200

Answer & Explanation Solved by verified expert
4.3 Ratings (760 Votes)

Correct answer---- 323,800

STEP 1

Reconciliation of Units

Units

% already completed

% completed this period

Material

Conversion cost

Material

Conversion cost

Beginning WIP

       86,000

70%

25%

30%

75%

Units introduced

    2,89,000

Total units to be accounted for

    3,75,000

Completed and Transferred unit

    3,42,000

0%

0%

100%

100%

Ending WIP

       33,000

0%

0%

40%

10%

STEP 2

Equivalent Units

Total Units

Conversion Cost

Units Transferred:

% completed this period

Equivalent Units

From WIP

       86,000

75%

                64,500

From units started/Introduced

    2,56,000

100%

            2,56,000

Total

    3,42,000

            3,20,500

Total Units

Conversion Cost

Ending WIP

% completed this period

Equivalent Units

Total

       33,000

10%

                  3,300

Total EUP

    3,75,000

            3,23,800

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