Equivalent Units CalculationsFIFO Method Ferris Corporation

Equivalent Units Calculations-FIFO Method Ferris Corporation makes a powdered rug shampoo in two sequential departments, Compounding and Drying added at the beginning of the process in the Compounding Department. Conversion costs are added evenly throughout each process. Fe 8,000 pounds (80% processed), 74,000 pounds were started in process, 72,000 pounds transferred out, and end\' process was 50% processed. Materials are hod of process costing, In the Compounding Department, beginning work in process was ng work in rris uses the FIFO met Calculate equivalent units for the Compounding Department for March 2016. Ferris Corporation Flow of Units and Equivalent Units Calculation, March 2016 Equivalent Units %in March Direct Materials %in March Conversion Costs Complete/Transferred 8,000 Beginning inventory 8,000 100 % 100 % Started & completed78,400 x 78,400 X 100 % 50 % Ending inventory 78,400 X Tota

Solution

Solution :- Statement of equivalent production (FIFO Method)

Beginning WIP Units.

Units started & Completed in current period.

Closing WIP Units

8000

64000

10000

0 (0 %)

64000 (100 %)

10000 (100 %)

1600 ( 20 %)

64000 (100 %)

5000 ( 50 %)

Note 1 :- Equivalent units as to conversion cost for beginning WIP inventory units = 8000 * (100 % - 80 %) i.e., 8000 * 20 % = 1600 units.

Note 2 :- Units started & Completed in current period = 72000 - 8000 = 64000.

Conclusion :-

Particulars	Input	Equivalent units as to Material	Equivalent units as to Conversion cost
Beginning WIP Units. Units started & Completed in current period. Closing WIP Units	8000 64000 10000	0 (0 %) 64000 (100 %) 10000 (100 %)	1600 ( 20 %) 64000 (100 %) 5000 ( 50 %)
Total equivalent units	82000	74000	70600