Clean Corporation manufactures liquid window cleaner. The following information
ID: 2464296 • Letter: C
Question
Clean Corporation manufactures liquid window cleaner. The following information concerns its work in process:
• Beginning inventory, 40,000 (50 percent complete with respect to materials and 30 percent complete with respect to conversion costs).
• Transferred out, 207,000 gallons.
• Ending inventory (materials are 21 percent complete; conversion costs are 10 percent complete).
• Started this month, 240,000 gallons.
Required:
(a) Compute the equivalent units for materials using FIFO.
(b) Compute the equivalent units for conversion costs using FIFO.
Explanation / Answer
Beginning inventory
40,000
Transferred
207,000
Started during the year
240,000
Ending inventory
73,000
Units to be accounted
280,000
Units accounted for
280,000
Equivalent units
Physical unit
Materials
Conversion
Beginning
40,000
20,000 (50%)
28,000(70%)
Transferred
167,000
167,000
167,000
Ending inventory
73,000
15,330(21%)
7,300(10%)
Units
280,000
202,330
202,330
Beginning inventory
40,000
Transferred
207,000
Started during the year
240,000
Ending inventory
73,000
Units to be accounted
280,000
Units accounted for
280,000
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