Equivalent Units CalculationsFIFO Method Terrace Corporation makes an industrial cleaner in two sequential departments, Compounding and Drying. All material is added at the beginning of the process in the Compounding Department. Conversion costs are added evenly throughout each process. Terrace uses the FIFO method of process costing. In the Compounding Department, beginning work in process was 5,000 pounds (45% processed), 85,000 pounds were started, 80,000 pounds were transferred out, and ending work in process was 85% processed. Calculate equivalent units for the Compounding Department for August.