Question

The Geneva Company manufactures the famous Ticktock watch on an assembly-line basis. January 1 work-in-process consisted of 5,000 units partially completed. During the month, an additional 110,000 units were started, and 105,000 units were completed. The ending work-in-process was 60% complete as to conversion costs. Conversion costs are added evenly throughout the process. The following conversion costs were incurred: Beginning costs for work-in-process $1,500 Total current conversion costs $273,920 The conversion costs assigned to ending work-in-process totaled $15,360 using the FIFO method of process costing.

Required:	What was the percentage of completion as to conversion costs of the						5,000	units in beginning work-in-process
	inventory?

Answer 1

--Correct Answer = The percentage of completion as to conversion costs of the 5000 units in beginning WIP Inventory was 80% already complete and 20% completed this period.

--The same is calculated through following workings:

--Working #1

Beginning WIP units	5,000
Started	110,000
Total units to account for	115,000
Units accounted for:		Equivalent units for Conversion Cost
Beginning WIP Inventory	5,000	?
Started and completed	100,000	100,000
Ending Inventory	10,000	6,000
Total units accounted for	115,000	106,000

--Working #2

A	Ending WIP Physical units	10,000
B	% complete as to conversion cost	60%
C = A x B	Equivalent units of Ending Inventory	6,000
D	Conversion cost assigned to ending WIP	$              15,360.00
E = D/C	Cost per Equivalent units for conversion cost	$                        2.56

--Working #3 for answer

A	Total current conversion cost incurred	$           273,920.00
B	Cost per Equivalent units for conversion cost	$                        2.56
C = A/B	Total Equivalent units	107,000
D	Total Equivalents units as per Working #1	106,000
E = C- D	Equivalent units for Beginning WIP conversion cost	1,000
F	Physical units of beginning WIP	5,000
G = (E/F) x 100	% completed this period	20%
H = 100% - G	Answer: % of completion that was existing	80%