Question

Sunland Company had the following department information about physical units and percentage of completion:

	Physical Units
Work in process, May 1 (50%)	59200
Completed and transferred out	180100
Work in process, May 31 (50%)	49200

If all materials are added at the beginning of the production process, what is the total number of equivalent units for materials during May?

Answer 1

· The ‘equivalent unit’ answer is given by BOTH methods – Weighted Average method and FIFO Method

· Answer by Weighted Average method = 229,300 units

EUP - Weighted Average Method	Units	% Material	EUP Materials
Units TRANSFERRED	180,100	100%	180,100
Units of ENDING WIP	49,200	100%	49,200
Equivalent Units of Production			229,300

· Answer by FIFO Method = 170,100 units

EUP - FIFO Method	Units	% Material	EUP Materials
Units of ENDING WIP	49,200	100.0%	49,200
Units STARTED & COMPLETED [180100 – 59200]	120,900	100%	120,900
Units of beginning WIP	59,200	0.00%	-
Equivalent Units of Production			170,100