Question 9

GC produces premium quality lubricants that pass through different departments: (1) Dept I; (2)

Dept II; and (3) Dept III.

The Company uses the First-In-First-Out (FIFO) process costing method.

The production process in Dept II requires the input of three main types of ingredients listed as

follows:

(a) Material X;

(b) Material Y which is transferred from Dept I; and

(c) Material Z.

100% of Material X and 100% of Material Y are added at the beginning of the process.

For Material Z, 40% of the required quantities are added at the beginning of the process, 45% are added mid-way (i.e., 50% of conversion done) through the process and the remainder are added at the end of the process.

The following information relates to the operation of Dept II for October 2021.

Beginning work-in process (BWIP) (1 October 2021): 2,000 kg were 20% completed with

respect to conversion costs (CC).

Units started in the month were 240,000 kg.

Ending WIP (EWIP) as at 31 October 2021 were 2,800 kg and 60% completed with

respect to CC.

Assume there is no spoilage or loss.

Required:

Calculate the equivalent units of production for GC in Dept II for the month of October 2021.