Question

The production department in a process manufacturing system completed 90,000 units of product and transferred them to finished goods during a recent period. Of these units, 36,000 were in process at the beginning of the period. The other 54,000 units were started and completed during the period. At period-end, 18,000 units were in process

Part 1. Prepare the department’s equivalent units of production with respect to direct materials under each of three separate assumptions using the weighted-average method for process costing.

Part 2. Prepare the department’s equivalent units of production with respect to direct materials under each of the three separate assumptions using the FIFO method for process costing.

Equivalent Units of Production (EUP)—Weighted Average Method
1. All direct materials are added to products when processing begins.
	Units	% Materials	EUP—Materials
Total EUP
				2. Beginning inventory is 40% complete as to materials and conversion costs. Ending inventory is 80% complete as to materials and conversion costs.
	Units	% Materials	EUP—Materials
Total EUP
				3. Beginning inventory is 70% complete as to materials and 30% complete as to conversion costs. Ending inventory is 20% complete as to materials and 70% complete as to conversion costs.
	Units	% Materials	EUP—Materials
Total EUP

Answer 1

under weighted avg method
Particulars			unit	% material	equivalent unit
unit completed			90000	100	90000
closing WIP			18000	100	18000
Total EUP			108000		108000
Under FIFO method
Particulars			unit	% material	equivalent unit
beginning WIP			36000	0	0
Unit completed			54000	100	54000
ending WIP			18000	100	18000
Total EUP			108000		72000
2)
Particulars			unit	% material	equivalent unit
beginning WIP			36000	60%	21600
Unit completed			54000	100%	54000
ending WIP			18000	80%	14400
Total EUP			108000		90000
3)
Particulars			unit	% material	equivalent unit
beginning WIP			36000	30%	10800
Unit completed			54000	100%	54000
ending WIP			18000	20%	3600
Total EUP			108000		68400

answered by: anonymous