Beginning inventory was partially complete (materials are 100 percent complete; conversion costs are 60 percent complete). Started this month, 59,500 units. Transferred out, 50,600 units. Ending inventory, 18,600 units (materials are 100 percent complete; conversion costs are 17 percent complete). Required: a. Compute the equivalent units for materials using FIFO. b. Compute the equivalent units for conversion costs using FIFO.

FIFO Equivalent Units Materials  12,250  

FIFO Equivalent Units  Conversion  77,700

Explanation:

FIFO assigns costs to the current period units. FIrst In First Out meaning the units first received will be completed first and delivered first.

FIFO Equivalent units can be calculated by the following.

   Particulars        Units           % of Completion          Equivalent Units

                                                Mat. Conversion          Materials C. Costs

Transferred out,  157,500           100        100            157,500     157,500

+Ending inventory, 52,500            10           20            5250         10,500

- Beginning Inventory 150,500     100          60        150,500       90,300

FIFO Equivalent Units                                                12,250         77,700

Calculations:

Ending Inventory= Opening + Started - Transferred Out

Ending Inventory=30,000 +180,000 -157,500 = 52,500 gallons

Beginning Inventory = Transferred Out + Ending Units- Units Started

Beginning Inventory = 157,500+ 52,500-59,500= 150,500

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