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:

1. All materials are added at the beginning of the process.
2. Beginning work in process had 73,600 units, 40 percent complete with respect to conversion costs.
3. Ending work in process had 15,700 units, 35 percent complete with respect to conversion costs.
4. Started in process, 90,600 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:
Units in beginning inventory	73600
Units started	90600
Total units to account for	164200
Units accounted for:
Units completed and transferred out:
Units transferred from beginning invrntory	73600
Units started and completed	74900
Units in ending inventory	15700
Total units accounted for	164200

Requirement 2

Weighted average	Equivalent units
Material	164,200
Conversion	153,995

Working

Reconciliation of Units
A	Opening WIP	73,600
B	Introduced	90,600
C=A+B	TOTAL	164,200
D	Transferred	148,500
E=C-D	Closing WIP	15,700

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	148,500			100%	148,500.0	100%	148,500
Closing WIP	15,700			100%	15,700.0	35%	5,495
Total	164,200			Total	164,200.0	Total	153,995

Requirement

FIFO	Equivalent units
Material	90,600
Conversion	124,555

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	73,600	100%	40%	0%	60%
Units introduced	90,600
Total units to be accounted for	164,200
Completed and Transferred unit	148,500	0%	0%	100%	100%
Ending WIP	15,700	0%	0%	100%	35%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	73,600	0%	-	60%	44,160
From units started/Introduced	74,900	100%	74,900	100%	74,900
Total	148,500		74,900		119,060
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	15,700	100%	15,700	35%	5,495
Total EUP	164,200		90,600		124,555