Question

Pierce & Company provides the following information concerning the work in process at its plant: 1....

Pierce & Company provides the following information concerning the work in process at its plant:

1. Beginning inventory was partially complete (materials are 100 percent complete; conversion costs are 61 percent complete)

2. Started this month, 59,500 units

3. Transferred out, 49,800 units

4. Ending inventory, 19,400 units (materials are 100 percent complete; conversion costs are 15 percent complete)

Required:

a. Compute the equivalent units for materials using FIFO

b. Compute the equivalent units for conversion costs using FIFO

Business   Accounting   
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Homework Answers

Answer #1

Solution:

Beginning inventory units = units transferred out + ending inventory units - units started

= 49800 +19400-59500 = 9700

Units started and completed = units transferred out - beginning inventory units = 49800 -9700 = 40100

Part a:

Equivalent units from materials = beginning units*0% + units started and completed*100% + ending units*100%

= 9700*0% +40100*100% + 19400*100%

= 59,500 units

Part b:

Equivalent units from conversion = beginning units*39% + units started and completed*100% + ending units*15%

= 9700*39% +40100*100% + 19400*15%

= 46,793 units

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