DeFond Company has a process costing system. All materials are introduced at the

Question

DeFond Company has a process costing system. All materials are introduced at the beginning of the process in Department One. The following information is available for the month of January: Units Work in process, July 1 (40% complete for conversion) 430 Started 2,100 Completed and transferred to Department 2 1,990 Work in process, July 31 (60% complete for conversion) 540 Materials    Conversion    A) 430 172 B) 1,990 1,990 C) 540 324 D) 2,100 2,142 E) 2,530 2,142 What are the equivalent units for the month of July if the company uses the FIFO method? /    DeFond Company has a process costing system. All materials are introduced at the beginning of the process in Department One. The following information is available for the month of January: Units Work in process, July 1 (40% complete for conversion) 430 Started 2,100 Completed and transferred to Department 2 1,990 Work in process, July 31 (60% complete for conversion) 540 Materials    Conversion    A) 430 172 B) 1,990 1,990 C) 540 324 D) 2,100 2,142 E) 2,530 2,142 What are the equivalent units for the month of July if the company uses the FIFO method? /   

Explanation / Answer

Ans.(D) The equivalent units for the month of July if the company uses the FIFO method are as follows.

Particulars Materials Conversion Work in Process July 1 430 units100% complete for Material 0 430 units(100%-40%) complete for Conversion 258 Units started and completted in July(1990-430) 1560 1560 Work in Process July 31, 540units (60% complete for conversion) 540 100% complete for Material 540 540 units 60% complete for Conversion 324 Equivalent Units 2100 2142

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