In: Accounting
Alaskan Fisheries, Inc., processes salmon for various distributors and it uses the weighted-average method in its process costing system. The company has two processing departments—Cleaning and Packing. Data relating to pounds of salmon processed in the Cleaning Department during July are presented below:
Percent Completed | |||||
Pounds of Salmon | Materials | Labor and Overhead | |||
Work in process inventory, July 1 | 31,000 | 100 | % | 60 | % |
Work in process inventory, July 31 | 24,000 | 100 | % | 90 | % |
A total of 500,000 pounds of salmon were started into processing during July. All materials are added at the beginning of processing in the Cleaning Department.
Required:
Compute the Cleaning Department's equivalent units of production for materials and for labor and overhead in the month of July.
Materials | Labor and Overhead | |||||||||||
Equivalent units of production | 5,31,000 | 5,28,600 | ||||||||||
Working: | ||||||||||||
# 1 | Calculation of units completed: | |||||||||||
Work in process inventory, July 1 | 31,000 | |||||||||||
Add units started during July | 5,00,000 | |||||||||||
Less Work in process inventory, July 31 | 24,000 | |||||||||||
Units completed | 5,07,000 | |||||||||||
# 2 | Calculation of Equivalent units of production: | |||||||||||
Materials | Labor and Overhead | |||||||||||
Physical Units | % completion | Equivalent units of production | % completion | Equivalent units of production | ||||||||
Units completed | 5,07,000 | 100% | 5,07,000 | 100% | 5,07,000 | |||||||
Work in process inventory, July 31 | 24,000 | 100% | 24,000 | 90% | 21,600 | |||||||
Total | 5,31,000 | 5,31,000 | 5,28,600 | |||||||||