Question

Gaba Corporation uses the FIFO method in its process costing system. The Grinding Department started the month with 19,000 units in its beginning work in process inventory that were 60% complete with respect to conversion costs. An additional 80,000 units were transferred in from the prior department during the month to begin processing in the Grinding Department. During the month 90,000 units were completed in the Grinding Department and transferred to the next processing department. There were 9,000 units in the ending work in process inventory of the Grinding Department that were 10% complete with respect to conversion costs. What were the equivalent units of production for conversion costs in the Grinding Department for the month?

• 79,500

• 90,900

• 90,000

• 70,000

Answer 1

Working Notes: 1
CALCULAITON OF UNITS COMPLETED AND TRANSFERRED OUT
Opening - Completed and tranfered out =		19000
Introduced and finished=		71000
Total Completed and transerred out =		90000
CALCULAITON OF THE EQUIVALENT UNITS OF PRODUCTION OF CONVERSION COST
	Conversion Cost	% Complete	To Be Completed	Equivalent Units
Opening Inventory	19000	60%	40%	7600
Add: Introduced and finished	71000	0%	100%	71000
Ending , Work-in-process	9000	0%	10%	900
Total Equivalent units				79500
Answer = Option 1 = 79,500 Units