Question

Zorzi Corporation uses a process costing system. The following information is available for one department in December.

                                                                                          Percent Completed

                                                            Units                Materials          Conversion

Work in Process December 1                            30,000                        65%                        30%

Work in Process December 31                         15,000                       80%                         40%

The Department started 175,000 units into production during the month and transferred 190,000 completed units

To the next department.

Required:

Compute the equivalent units of production for December assuming that the company uses the weighted-average method of accounting for units and costs.

Compute the equivalent units of production for December assuming that the company uses the FIFO method of accounting for units and costs.

Answer 1

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Part 1	Quantities			Equivalent Units
			Whole Units	Materials	Conversion Cost
	Units to be account for
	Work in Process, Beginning		30,000
	add:Started into production		175,000
	-Total Units		205,000
	Units accounted for
	Transferred out		190,000	190,000	190,000
	Work in Process, Ending		15,000	12,000	6,000		80%	40%
	Equivalent Units-Weighted Average		205,000	202,000	196,000
Part 2	Quantities			Equivalent Units
			Whole Units	Materials	Conversion Cost	Complete
	Units to be account for
	Work in Process, Beginning		30,000	10,500	21,000		65%	30%
	Units Started and Completed		160,000	160,000	160,000		100%	100%
	Work in Process, Ending		15,000	12,000	6,000		80%	40%
	Equivalent Units-FIFO		205,000	182,500	187,000