Reference no: EM133046902

Question - Test Company uses a normal, process costing system to determine product cost. The company uses the first-in, first-out (FIFO) method to account for equivalent units and costs in beginning work-in-process.

The product passes through two departments: Department 1 and Department 2. In Department 2, all direct materials are added at the beginning of the process. The following information is available for Department 2 in July.

Work-in-process, July 1

Units 5,000 units

Costs

Direct materials $25,000

Conversion cost 16,000

Transferred-in cost 20,000

July activity

Units

Transferred in 50,000 units

Completed and transferred out 45,000 units

Costs added

Direct materials $400,000

Conversion cost 184,000

Transferred-in-cost 200,000

Percentage of completion

Work-in-process, July 1 60%

Work-in-process, July 31 40%

Required - Determine the number of units to account for from the July production report.