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Iowa Company uses a process costing system. Operating data for the first processing department for the...

Iowa Company uses a process costing system. Operating data for the first processing department for the month of June appear below:

Units

Percent Complete with Respect to Conversion

Beginning work-in-process inventory

15,000

30%

Started into production during June

75,000

Ending work-in-process inventory

20,000

70%

According to the company's records, the conversion cost in beginning work-in-process inventory was $49,920 at the beginning of June. Additional conversion costs of $855,120 were incurred in the department during the month.

1. How many units are transferred out?

  1. If Iowa uses the weighted-average method, what are the equivalent units of conversion for the month?

  If Iowa uses the weighted-average method, what is the cost per equivalent units of conversion for the month?

3.  If Iowa uses the FIFO method, what are the equivalent units of conversion for the month?

  If Iowa uses the FIFO method, what is the cost per equivalent units of conversion for the month?

Solutions

Expert Solution

Iowa company
Weighted Average Method:
Equivalent Units
Conversion costs
Whole units % Units
Opening WIP 15000
Started 75000
Total Units to account for 90000
Completed and tfd.( answer 1 ) 70000 100 70000
Closing WIP 20000 70 14000
Total Units to account for 90000 84000 Answer 2
Cost Information
Costs to account for: Conversion
Op. WIP 49920
Added during the period 855120
Unit costs 905040
EUP 84000
Cost per EUP 10.77428571 Answer 2
FIFO Method:
Conversion costs
Whole units % Units
Opening WIP 15000
Started 75000
Total Units to account for 90000
Opening WIP 15000 70 10500
Completed and tfd. 55000 100 55000
Closing WIP 20000 70 14000
Total Units to account for ( EUP) 90000 79500 Answer 3
Cost Information
Costs to account for: Conversion
Op. WIP 49920
Added during the period 855120
Total costs to account for 905040
Cost per EUP :-
Cost to be accounted for 855120
EUP 79500
Cost per EUP 10.75622642 Answer 3

ekkarill92 answered 2 years ago
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