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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 1 year ago
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