The following production data were taken from the records of the Finishing Department for June: Inventory in process, June 1 (30% completed) 4,000 units Completed units during June 65,000 units Ending inventory (60% complete) 7,000 units What is the number of conversion equivalent units of production in the June 30 Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories?

Under the FIFO, when accounting for completed units during a period, it assumed that the opening are first completed before the newly introduced ones.

This principle is adopted as follows:

Item units Equiv Unit

Inventory 4,000 4000 × 70% 2,800

Fully worked 58,000 58,000 × 100% 58,000

Closing Inventory 7,000 7000 × 60% 4,200

65,000

Note

Fully worked units: These represent units of inventory that were started in a current period and completed that same period. The fully worked units are calculated in order to separate the opening inventory from the the newly introduced when accounting for completed units under the FIFO.

The opening was brought forward from May when 30% of work is already done, so the balance of 70% is expected to be done in June.

Also out of the 65,000 units completed in June, under FIFO, we assume that the first 4,000 units of opening inventory were completed first

Number of conversion equivalent units of production = 65,000 units