Question

The Converting Department of Soft Touch Towel and Tissue Company had 760 units in work in process at the beginning of the period, which were 75% complete. During the period, 16,000 units were completed and transferred to the Packing Department. There were 840 units in process at the end of the period, which were 75% complete. Direct materials are placed into the process at the beginning of production.

Determine the number of equivalent units of production with respect to direct materials and conversion costs. If an amount is zero, enter in "0".

Answer 1

Which method to be used is not given so i have solved in both method

Solution by Weighted average method

	Material	Conversion
Equivalent Units of Production	16,840	16,630

Reconciliation of Units
A	Opening WIP	760
B	Introduced	16,080
C=A+B	TOTAL	16,840
D	Transferred	16,000
E=C-D	Closing WIP	840

Statement of Equivalent Units
				Material		Conversion
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	16,000			100%	16,000	100%	16,000
Closing WIP	840			100%	840	75%	630
Total	16,840			Total	16,840	Total	16,630

.

Alternate solution using FIFO method

	Material	Conversion
Equivalent Units of Production	16,080	16,060

STEP 1
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	760	100%	75%	0%	25%
Units introduced	16,080
Total units to be accounted for	16,840
Completed and Transferred unit	16,000	0%	0%	100%	100%
Ending WIP	840	0%	0%	100%	75%

STEP 2
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	760	0%	-	25%	190
From units started/Introduced	15,240	100%	15,240	100%	15,240
Total	16,000		15,240		15,430
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	840	100%	840	75%	630
Total EUP	16,840		16,080		16,060