Question
HOC manufactures liquid detergent and uses a process costing system. The liquid detergent is processed in two departments: blending and packaging. Liquid detergent that is
HOC manufactures liquid detergent and uses a process costing system. The liquid detergent is processed in two departments: blending and packaging. Liquid detergent that is produced in the blending department is transferred to the packaging department at the start of the packaging process. Conversion costs ('CC') are added evenly throughout the packaging process. During October 2021, HOCs first month of operations, the company manufactured and sold 168,000 packets of liquid detergent. Each packet of liquid detergent contains five (5) litres.
At the end of October 2021, there were 24,000 litres of the liquid detergent remaining in work in process (WIP) of the packaging department. This WIP is 100% complete with respect to material, and 70% complete with respect to conversion costs. There was no beginning and ending WIP in the blending department for October 2021.
Required: Using FIFO process costing, compute equivalent units of production for HOC in the packaging department in October 2021.
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