The following data pertain to the Milling Department of Malmberg Corporation for July. The company uses the FIFO method in its process costing. Percent Complete UnitsMaterialsConversionWork in process, July 180080%35%Units started into production during July9,400 Units completed during July and transferredto the next department8,300 Work in process, July 311,90075%40% Required:Compute the equivalent units of production for both materials and conversion costs for the Milling Department for July 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 = 8,300 ? 800 = 7,500
| Materials | Conversion | |
| To complete beginning work in process: | ||
| Materials: 800 units × (100% ? 80%) | 160 | |
| Conversion: 800 units × (100% ? 35%) | 520 | |
| Units started and completed during the period | 7,500 | 7,500 |
| Ending work in process: | ||
| Materials: 1,900 units × 75% | 1,425 | |
| Conversion: 1,900 units × 40% | 760 | |
| Equivalent units of production | 9,085 | 8,780 |
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