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Pierce & Company provides the following information concerning the work in process at its plant: • Beginning...

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Accounting

Pierce & Company provides the following informationconcerning the work in process at its plant:

• Beginning inventory was partially complete (materials are 100percent complete; conversion costs are 61 percent complete).

• Started this month, 59,300 units.

• Transferred out, 50,200 units.

• Ending inventory, 18,700 units (materials are 100 percentcomplete; conversion costs are 15 percent complete).

Required:

a. Compute the equivalent units for materialsusing FIFO.

b. Compute the equivalent units for conversioncosts using FIFO.

Answer & Explanation Solved by verified expert
4.5 Ratings (731 Votes)

Solution

Equivalent units for materials using FIFO= 59,300

Equivalent units for conversion costs using FIFO = 47,149

Working

STEP 1 (FIFO)
Reconciliation of Units
Units % already completed % completed this period
Material Conversion cost Material Conversion cost
Beginning WIP               9,600 100% 61% 0% 39%
Units introduced             59,300
Total units to be accounted for             68,900
Completed and Transferred unit             50,200 0% 0% 100% 100%
Ending WIP             18,700 0% 0% 100% 15%

.

STEP 2 (FIFO)
Equivalent Units
Total Units Material Conversion cost
Units Transferred: % completed this period Equivalent Units % completed this period Equivalent Units
From WIP               9,600 0%                             -   39%                          3,744
From units started/Introduced             40,600 100%                   40,600 100%                        40,600
Total             50,200                   40,600                        44,344
Total Units Material Conversion cost
Ending WIP % completed this period Equivalent Units % completed this period Equivalent Units
Total             18,700 100%                   18,700 15%                          2,805
Total EUP             68,900                   59,300                        47,149

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