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15 December, 08:52

The following data pertain to a company's cracking-department operations in December:

Units

Completion

Work-in-process, December 1

20,000

50%

Units started

170,000

Units completed and transferred to the distilling department

180,000

Work-in-process, December 31

10,000

50%

Materials are added at the beginning of the process, and conversion costs are incurred uniformly throughout the process. Assuming use of the FIFO method of process costing, the equivalent units of production (EUP) with respect to conversion performed during December were

A 175,000

B 185,000

C 170,000

D 180,000

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Answers (1)
  1. 15 December, 11:46
    0
    B 185,000

    Explanation:

    Equivalent Units of Production

    =Work-in-process December 1 (20,000 * 50% = 10,000) + Units started (170,000) + Work-in-process, December 31 (10,000 * 50% = 5,000)

    Equivalent Units of Production for conversion costs = 10,000 + 170,000 + 5000

    Equivalent Units of Production for conversion costs for December = 185,000

    As FIFO Method of inventory is used first the beginning WIP is completed then units started and at the ending WIP.
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