Lenning Corporation uses the FIFO method in its process costing. The following data pertain to its Assembly Department for August. Percent Complete UnitsMaterialsConversionWork in process, August 130075%10%Units started into production during August6,100 Units completed during August and transferredto the next department5,600 Work in process, August 3180090%85% Required:Compute the equivalent units of production for both materials and conversion costs for the Assembly Department for August using the FIFO method.
What will be an ideal response?
FIFO method:
Units started and completed during the period = Units completed during the period ? Units in beginning work in process inventory = 5,600 ? 300 = 5,300
| Materials | Conversion | |
| To complete beginning work in process: | ||
| Materials: 300 units × (100% ? 75%) | 75 | |
| Conversion: 300 units × (100% ? 10%) | 270 | |
| Units started and completed during the period | 5,300 | 5,300 |
| Ending work in process: | ||
| Materials: 800 units × 90% | 720 | |
| Conversion: 800 units × 85% | 680 | |
| Equivalent units of production | 6,095 | 6,250 |
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