Farsat Inc. uses the FIFO method in its process costing system. The following data concern the operations of the company's first processing department for a recent month. Work in process, beginning: Units in process500 Percent complete with respect to materials80%Percent complete with respect to conversion20%Units started into production during the month20,000 Work in process, ending: Units in process600 Percent complete with respect to materials60%Percent complete with respect to conversion50% Required:Using the FIFO method, determine the equivalent units of production for materials and conversion costs.
What will be an ideal response?
FIFO method:
Units started and completed during the period = Units started into production during the period - Units in ending work in process inventory = 20,000 - 600 = 19,400
| Materials | Conversion | |
| To complete beginning work in process: | ||
| Materials: 500 units × (100% ? 80%) | 100 | |
| Conversion: 500 units × (100% ? 20%) | 400 | |
| Units started and completed | 19,400 | 19,400 |
| Ending work in process: | ||
| Materials: 600 units × 60% | 360 | |
| Conversion: 600 units × 50% | 300 | |
| Equivalent units of production | 19,860 | 20,100 |
You might also like to view...
An important implication for an individual to remember when facing a negotiating team on the other side is
A. Both of these options are correct. B. be aware the team may be aggressive in pursuing its interests and claiming value. C. Neither of these options are correct. D. avoid the trap of assuming that the other party has disproportionate power because it chose to send a team to negotiate.
A tornado demolished several delivery vans owned for three years by Wadham Company. Wadham's adjusted basis in the vans was $28,400, and Wadham paid $90,000 to purchase new vans. Wadham received a $25,000 settlement from its casualty insurance company. Consequently, Wadham recognizes:
A. $65,000 ordinary loss B. $3,400 Section 1231 loss C. $65,000 Section 1231 loss D. None of the above
Fraud in the inception occurs when a party is tricked into signing a negotiable instrument while
thinking he/she is signing something else. Indicate whether the statement is true or false
On January 4, Year 1, Barber Company purchased 5100 shares of Convell Company for $60,500 plus a broker's fee of $1020. Convell Company has a total of 25,500 shares of common stock outstanding and it is presumed the Barber Company will have a significant influence over Convell. During each of the next two years, Convell declared and paid cash dividends of $0.85 per share, and its net income was $73,000 and $68,000 for Year 1 and Year 2, respectively. What is the book value of Barber's investment in Convell at the end of Year 2?
A. $89,720. B. $88,720. C. $52,850. D. $81,050. E. $61,520.