Question

Satina Corporation's Department A has the following information:

	% Completed	Costs
Beginning work in process: 6,000 units
Direct Materials	80	$	43,708
Conversion	40		35,550
New Units Started: 28,000 units
Direct Materials			112,000
Conversion			88,200
Ending work in process: 2,000 units
Direct Materials	60
Conversion	50

Required: Complete the tables below using the weighted-average and FIFO methods

	Physical Units	Weighted Average Equivalent Units		FIFO Equivalent Units
		Materials	Conversion	Materials	Conversion
Beginning WIP
Units started
Total to account for
Units Finished
Ending WIP
Total accounted for
Total Equivalent Units

	Weighted Average	FIFO
a. Cost Per Equivalent units
b. Cost completed and transferred out
c. Cost in the ending work-in-process inventory

Answer 1

Solution - Weighted average

Computation of Equivalent unit of Production - Weighted Average - Department A
Particulars	Physical Units	Material	Conversion
Unit completed & Transferred out (6000 + 28000 - 2000)	32000	32000	32000
Closing WIP:	2000
Material (60%)		1200
Conversion (50%)			1000
Equivalent units of production	34000	33200	33000

Computation of Cost per equivalent unit of Production - Weighted Average - Department A
Particulars	Material	Conversion
Opening WIP	$43,708.00	$35,550.00
Cost Added during period	$112,000.00	$88,200.00
Total cost to be accounted for	$155,708.00	$123,750.00
Equivalent units of production	33200	33000
Cost per Equivalent unit	$4.69	$3.75

Computation of Cost of ending WIP and units completed & transferred out - Weighted Average - Department A
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	1200	1000
Cost per equivalent unit	$4.69	$3.75
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$5,628	$3,750	$9,378
Units completed and transferred	32000	32000
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$150,080	$120,000	$270,080

Solution - FIFO:

Satina Corporation
Department A
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	6000
Units started this period	28000
Total unit to be accounted for	34000
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 20% Conversion - 60%	6000	1200	3600
Started and completed currently	26000	26000	26000
Units in ending WIP Material - 60% Conversion - 50%	2000	1200	1000
Total units accounted for	34000	28400	30600

Satina Corporation
Department A
Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$200,200.00	$112,000.00	$88,200.00
Equivalent units		28400	30600
Cost per equivalent unit		$3.94	$2.88

Satina Corporation
Department A
Producton cost report - FIFO
Particulars	Total cost	Material	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$79,258	$43,708	$35,550
Current cost added to complete beginning WIP:
Material (1200*$3.94)	$4,732	$4,732
Conversion (3600 * $2.88)	$10,376		$10,376
Total Cost from beginning inventory	$94,367	$48,440	$45,926
Current cost of unit started and completed:
Material (26000*$3.94)	$102,535	$102,535
Conversion (26000*$2.88)	$74,941		$74,941
Total cost of unit started and completed	$177,476	$102,535	$74,941
Total cost of unit transferred out	$271,843	$150,976	$120,868
Cost assigned to ending WIP:
Material (1200*$3.94)	$4,732	$4,732
Conversion (1000*$2.88)	$2,882		$2,882
Total ending WIP inventory	$7,615	$4,732	$2,882
Total cost accounted for	$279,458	$155,708	$123,750