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Calculate equivalent units using FIFO and weighted-average

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On March 1, a Company had 20,000 units of WIP in Department A, which were 100% complete as to material costs and 30% complete as to conversion costs. During March, 150,000 units were started in Department A and 160,000 units were completed and transferred to Department B. WIP on March 31 was 100% complete as to material costs and 50% complete as to conversion costs.

By what amount would the equivalent units for conversion costs for the month of March differ if the FIFO method were used instead of the weighted-average method?
10,000 decrease.
8,000 decrease.
6,000 decrease.
5,000 decrease.
4,000 decrease

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Solution Preview

Equivalent units for conversion cost using weighted average method = 160000 [fully ...

Solution Summary

This post shows how to calculate the equivalent units using FIFO and weighted-average method of inventory valuation.

$2.19