Question

At Crenshaw Company, materials are entered at the beginning of each process. Work in process inventories, with the percentage of work done on conversion, and production data for its Painting Department in selected months are as follows: Beginning Work In Process Ending Work in Process Month Units Percentage Completed Units Completed and Transferred Out Units Percentage Completed July 0 - 11,000 1,500 90% Sept. 2,500 20% 9,000 5,000 70% Compute the physical units for July Compute the equivalent units of production for materials and conversion costs for September.

Answer 1

Requirement 1:

Computation of Physical units for the month of July:

Month	July
Beginning work in process	0
Started in to production	12,500
Total units to be accounted for	12,500
Units transferred out	11,000
Add: Ending work in process	1,500
Total units accounted for	12,500

Requirement 2:

Computation of Equivalent units for the month of September:

		Equivalent Units
	Physical units	Material	Conversion
Units completed and transferred out	9,000	9,000	9,000
Add: Ending work in process	5,000	5,000	*3,500
Total equivalent units	14,000	14,000	12,500

*Ending WIP Units completed w.r.t. conversion cost = WIP units x % completed

                                                                                   = 5,000 x 70 % = 5,000 x 0.7

                                                                                    = 3,500