Question
In: Accounting
Magic Company adds materials at the beginning of the process in Department A. The following information...
Magic Company adds materials at the beginning of the process in Department A. The following information on physical units for Department A for the month of August is available:
Work in process, August 1 (64% complete with respect to conversion) 17,400
Started in August 120,000
Completed 120,000
Work in process, August 31 (75% complete with respect to conversion) 17,400
Required:
a. Compute the equivalent units for materials costs and for conversion costs using the weighted-average method.
b. Compute the equivalent units for materials costs and for conversion costs using the FIFO method.
Solutions
Expert Solution
Requirement a
| Material | Conversion | |
| Equivalent Units of Production | 137,400 | 133,050 |
Requirement b
| Material | Conversion | |
| Equivalent Units of Production | 120,000 | 121,914 |
Working
| Statement of Equivalent Units(Weighted average) | |||||||
| Material | Conversion | ||||||
| Units | Complete % | Equivalent units | Complete % | Equivalent units | |||
| Transferred out | 120,000 | 100% | 120,000 | 100% | 120,000 | ||
| Ending WIP | 17,400 | 100% | 17,400 | 75% | 13,050 | ||
| Total | 137,400 | Total | 137,400 | Total | 133,050 |
.
| STEP 1 (FIFO) | |||||
| Reconciliation of Units | |||||
| Units | % already completed | % completed this period | |||
| Material | Conversion | Material | Conversion | ||
| Beginning WIP | 17,400 | 100% | 64% | 0% | 36% |
| Units introduced | 120,000 | ||||
| Total units to be accounted for | 137,400 | ||||
| Completed and Transferred unit | 120,000 | 0% | 0% | 100% | 100% |
| Ending WIP | 17,400 | 0% | 0% | 100% | 75% |
.
| STEP 2 (FIFO) | |||||
| Equivalent Units | |||||
| Total Units | Material | Conversion | |||
| Units Transferred: | % completed this period | Equivalent Units | % completed this period | Equivalent Units | |
| From WIP | 17,400 | 0% | - | 36% | 6,264 |
| From units started/Introduced | 102,600 | 100% | 102,600 | 100% | 102,600 |
| Total | 120,000 | 102,600 | 108,864 | ||
| Total Units | Material | Conversion | |||
| Ending WIP | % completed this period | Equivalent Units | % completed this period | Equivalent Units | |
| Total | 17,400 | 100% | 17,400 | 75% | 13,050 |
| Total EUP | 137,400 | 120,000 | 121,914 |
ekkarill92 answered 2 years agoRelated Solutions
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