Nanjing Company uses a process costing system to track production costs. It operates three departments in...

Nanjing Company uses a process costing system to track production costs. It operates three departments in its production process. Production data for Department #2 for the month of November is given below:

	Units	Percent complete withrespect to DM
Beginning work in process inventory	7,300	40	%
Transferred in from Department #1 during November	37,500
Completed and transferred to Department #3 during November	35,600
Ending work in process inventory	9,200	70	%

DM is added evenly throughout the process. What were the equivalent units of production for DM in Department #2 for November?

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Expert Solution

Requirement asked: Equivalent units for DM

Note: Since ‘method’ to be used is not given, I’ve provided the workings for BOTH the methods – the FIFO method and Weighted Average method.

Answer by FIFO Method

EUP - FIFO Method	Units	% Material	EUP Materials
Units of ENDING WIP	9,200	70.0%	6,440
Units STARTED & COMPLETED	28,300 [35600 – 7300]	100%	28,300
Units of beginning WIP	7,300	60.00% [40% was already complete]	4,380
Equivalent Units of Production			39,120 [Answer]

Answer by Weighted Average method

EUP - Weighted Average Method	Units	% Material	EUP Materials
Units TRANSFERRED	35,600	100%	35,600
Units of ENDING WIP	9,200	70%	6,440

Equivalent Units of Production			42,040 [Answer]

ekkarill92 answered 1 year ago

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