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In: Statistics and Probability

FIFO method, equivalent units

FIFO method, equivalent units. Refer to the information in Exercise 17-19. Suppose the Assembly Division at Fenton Watches, Inc., uses the FIFD method of process costing instead of the weighted-average method. Compute equivalent units for direct materials and conversion costs. Show physical units in the first column of your schedule.

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Expert Solution

FIFO method, equivalent units.

Under the FIFO method, equivalent units are calculated as the equivalent units of work done in the current period only. Solution Exhibit 17-21 shows equivalent units of work done in May 2009 in the Assembly Division of Fenton Watches, Inc., for direct materials and conversion costs.

 

SOLUTION EXHIBIT 17-21

Steps 1 and 2: Summarize Output in Physical Units and Compute Output in Equivalent Units;

FIFO Method of Process Costing, Assembly Division of Fenton Watches, Inc., for May 2009.

·Degree of completion in this department: direct materials, 90%; conversion costs, 40%.

†460 physical units completed and transferred out minus 80 physical units completed and transferred out from beginning work-in-process inventory.

*Degree of completion in this department: direct materials, 60%; conversion costs, 30%.

Raffay answered 2 years ago
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