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Aaron Company has a process costing system. All materials are introduced when conversion costs reach 50...

Aaron Company has a process costing system. All materials are introduced when conversion costs reach 50 percent. The following information is available for physical units during March. Work in process, March 1 (60% complete as to conversion costs) 150,000 Units started in March 600,000 Units transferred to Finishing Department in March 630,000 Work in process, March 31 (40% complete as to conversion costs) 120,000 Required: a. Compute the equivalent units for materials costs and for conversion costs using the weighted-average method. b. Compute the equivalent units for materials costs and for conversion costs using the FIFO method.

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Answer #1

a. Compute the equivalent units for materials costs and for conversion costs using the weighted-average method.

Physical unit % EUP-material % EUP-Conversion cost
Unit transferred out 630000 100% 630000 100% 630000
Ending work in process 120000 0% 0 40% 48000
Total 750000 630000 678000

b. Compute the equivalent units for materials costs and for conversion costs using the FIFO method.

Physical unit % EUP-material % EUP-convesion cost
Beginning work in process 150000 0% 0 40% 60000
Units started & completed 480000 100% 480000 100% 480000
Ending work in process 120000 0% 0 40% 48000
Total 750000 480000 588000
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