Question

Weighted Average Method, FIFO Method, Physical Flow, Equivalent Units

Heap Company manufactures a product that passes through two processes: Fabrication and Assembly. The following information was obtained for the Fabrication Department for September:

All materials are added at the beginning of the process.

Beginning work in process had 71,200 units, 40 percent complete with respect to conversion costs.

Ending work in process had 13,400 units, 20 percent complete with respect to conversion costs.

Started in process, 101,200 units.

Required:

1. Prepare a physical flow schedule.

Heap Company
Physical Flow Schedule
Units to account for:
Total units to account for
Units accounted for:
Units completed and transferred out:
Total units accounted for

2. Compute equivalent units using the weighted average method.

Weighted average method:	Equivalent Units
Direct Materials
Conversion Costs

3. Compute equivalent units using the FIFO method.

FIFO method:	Equivalent Units
Direct Materials
Conversion Costs

Answer 1

Requirement 1

Heap Company
Physical Flow Schedule
Units to account for:
Beginning WIP Inventory	71200
Total Units started	101200
Total units to account for	172400
Units accounted for:
Units completed and transferred out:	159000
Units in Ending WIP Inventory	13400
Total units accounted for	172400

Requirement 2

Statement of Equivalent Units (Weighted Average)
		Material		Conversion Cost
	Units	Complete %	Equivalent units	Complete %	Equivalent units
Transferred	159,000	100%	159,000	100%	159,000
Closing WIP	13,400	100%	13,400	20%	2,680
Total	172,400	Total	172,400	Total	161,680

	Material	Conversion
Equivalent Units of Production	172,400	161,680

Requirement 3

STEP 1
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	71,200	100%	40%	0%	60%
Units introduced	101,200
Total units to be accounted for	172,400
Completed and Transferred unit	159,000	0%	0%	100%	100%
Ending WIP	13,400	0%	0%	100%	20%

STEP 2
Equivalent Units (FIFO)
	Total Units	Materials		Conversion Cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	71,200	0%	-	60%	42,720
From units started/Introduced	87,800	100%	87,800	100%	87,800
Total	159,000		87,800		130,520
	Total Units	Materials		Conversion Cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	13,400	100%	13,400	20%	2,680
Total EUP	172,400		101,200		133,200

	Material	Conversion
Equivalent Units of Production	101,200	133,200