Reference no: EM132818098

Heineken Inc. uses process costing to account for the production of its beers. Units of product are started in the Fermentation Department and then transferred to the Filtration Department. In both departments, units are inspected at the 70% stage of conversion. In the Fermentation process, materials are added at the start of processing while in the Filtration process, all materials are added after inspection point. The normal loss cannot exceed 5% of the units started or received from prior department.

Production data are as follows:

                                                                                   Fermentation              Filtration

Beginning Inventory/ Stage of completion               8,000 / 90%           10,000

Ending inventory / Additional work req'd                   10,000 / 10%       16,000

Transferred out                                                          ?                 32,000

Lost units                                                                4,000                 6,000

Problem 1: How much are the equivalent units of production of materials of the Fermentation department using FIFO method?