US CMA Part 1 · Chapter 4 · Question 10 of 22
A process had 4,000 units in beginning work in process, 60% complete for conversion costs. During the period 34,000 units were completed and transferred out, and ending work in process was 6,000 units, 40% complete for conversion. Using the FIFO method, what are the equivalent units for conversion costs?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) 34,000 units
Explanation
FIFO counts only the work done this period: finish beginning WIP 4,000 x 40% = 1,600; units started and completed 34,000 - 4,000 = 30,000; ending WIP 6,000 x 40% = 2,400. Total = 34,000. The weighted-average method would give 34,000 + 2,400 = 36,400.
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