Richards Corporation uses the FIFO method of process costing. The following info

Question

Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 82,000 units, 70% complete as to materials and 25% complete as to conversion. Units started and completed: 252,000. Units completed and transferred out: 334,000. Ending Inventory: 31,000 units, 40% complete as to materials and 15% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700. Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300. Calculate the equivalent units of materials.

Explanation / Answer

Equivalent unit of material = (Beginning inventory*percentage completed)+Units started and completed+(Ending inventory*percentage completed)

= (82000*30%)+(252000*100%)+(31000*40%)

Equivalent unit of material = 289000

so answer is c) 289000

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