Penny, Inc. employs a process costing system. Direct materials are added at the

Question

Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: On July 1:
Beginning inventories 850 units, 60% complete Direct materials cost $5,000 Conversion costs $4,000

During July:
Number of units started 15,000 Direct materials added $155,000 Conversion costs added $83,520

On July 31:
Ending inventories 1,600 units, 40% complete Using the FIFO method, the number of equivalent units of conversion costs was a. 14,380
b. 14,550
c. 14,400
d. 15,850 Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: On July 1:
Beginning inventories 850 units, 60% complete Direct materials cost $5,000 Conversion costs $4,000

During July:
Number of units started 15,000 Direct materials added $155,000 Conversion costs added $83,520

On July 31:
Ending inventories 1,600 units, 40% complete Using the FIFO method, the number of equivalent units of conversion costs was On July 1:
Beginning inventories 850 units, 60% complete Direct materials cost $5,000 Conversion costs $4,000

During July:
Number of units started 15,000 Direct materials added $155,000 Conversion costs added $83,520

On July 31:
Ending inventories 1,600 units, 40% complete

Explanation / Answer

Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July’s activities: On July 1: Beginning inventories 850 units, 60% complete Direct materials cost $5,000 Conversion costs $4,000 During July: Number of units started 15,000 Direct materials added $155,000 Conversion costs added $83,520 On July 31: Ending inventories 1,600 units, 40% complete Using the FIFO method, the number of equivalent units of conversion costs was a. 14,380 is the answer for sure

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