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Asked by Angie Rivera on May 30, 2024

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The number of equivalent units of production for the period for conversion, if the first-in, first-out method is used to cost inventories, was

A) 14,365
B) 13,615
C) 12,000
D) 15,865

Equivalent Units

A calculation used in cost accounting to express the amount of work done on partially finished goods in terms of fully completed units.

First-In, First-Out

An inventory valuation method that assumes goods are sold in the order they are acquired, with the cost of the oldest products being used to calculate cost of goods sold first.

Conversion

The process of changing assets, investments, or data from one form to another, often referring to the conversion of currencies or converting raw materials into finished goods.

  • Ascertain the equivalent units pertaining to conversion expenses through the application of the FIFO method.
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Patel DhrupalJun 02, 2024
Final Answer :
D
Explanation :
The equivalent units of production for conversion under the FIFO method are calculated by adding the completed units to the equivalent units in the ending work in process, minus the stage of completion of the beginning work in process. Here, 15,000 units were completed, and 1,700 units were 95% completed at the end of the period, giving 1,615 equivalent units for the ending work in process (1,700 * 95%). The beginning work in process was 25% completed, so we subtract the work needed to complete those units (3,000 * 25% = 750 units already accounted for in the previous period). Thus, the calculation is 15,000 + 1,615 - 750 = 15,865 equivalent units for conversion.

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