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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

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% Determine the equivalent units of output with respect to conversion cost for July.

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