Question

The Bottling Department of Rocky Springs Beverage Company had 5,250 ounces in beginning work in process inventory (90% complete). During the period, 87,500 ounces were completed. The ending work in process inventory was 7,000 ounces (60% complete). What are the total equivalent units for conversion costs? Note: Round to the nearest whole unit.

Answer 1

Since method to be used is not indicated ill solve the question with both weighted average and FIFO .

First Weighted average method

Reconciliation of Units
A	Opening WIP	5,250
B	Introduced	89,250
C=A+B	TOTAL	94,500
D	Transferred	87,500
E=C-D	Closing WIP	7,000

Statement of Equivalent Units
		Conversion Cost
	Units		Complete %	Equivalent units
Transferred	87,500		100%	87,500
Closing WIP	7,000		60%	4,200
Total	94,500		Total	91,700

Equivalent units = 91700

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Now FIFO method

STEP 1
Reconciliation of Units
	Units	% already completed		% completed this period
			Conversion cost		Conversion cost
Beginning WIP	5,250		90%		10%
Units introduced	89,250
Total units to be accounted for	94,500
Completed and Transferred unit	87,500		0%		20%
Ending WIP	7,000		0%		60%

STEP 2
Equivalent Units
	Total Units	Conversion Cost
Units Transferred:		% completed this period	Equivalent Units
From WIP	5,250	10%	525
From units started/Introduced	82,250	100%	82,250
Total	87,500		82,775
	Total Units	Conversion Cost
Ending WIP		% completed this period	Equivalent Units
Total	7,000	60%	4,200
Total EUP	94,500		86,975

Equivalent units = 86975