Correct answer iconCorrect! Equivalent units for conversion costs are: Beg. work in process (20,000 X 40%) 8,000 Units started and completed 300,000 Ending work in process (40,000 X 40%) 16,000 Total Equivalent Units 324,000 The Molding Department of the Smith Company has the following production data: beginning work in process 20,000 units (60% complete), started in production 340,000 units, completed and transferred out 320,000 units, and ending working process 40,000 units (40% complete). the equivalent units under the FIFO method for conversion costs are: 320,000. 350,000. 360,000. 324,000. I know the answer to the question is 324,000. What I don't know is, how they determined the units started and completed of 300,000?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
| Beg. work in process (20,000 X 40%) | 8,000 |
| Units started and completed | 300,000 |
| Ending work in process (40,000 X 40%) | 16,000 |
| Total Equivalent Units | 324,000 |
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