Question

Murray Chemical Company refines a variety of petrochemical products. These data are from the firm’s Houston plant:

Work-in-process inventory, September 1	4,000,000	gallons
Direct materials	50	% completed
Conversion	20	% completed
Units started in process during September	4,850,000	gallons
Work-in-process inventory, September 30	2,400,000	gallons
Direct materials	40	% completed
Conversion	60	% completed

Required:

1. Compute the equivalent units of direct materials and conversion for the month of September using the weighted-average method.

2. Compute the equivalent units of direct materials and conversion for the month of September using the FIFO method.

Answer 1

1		Whole units	Equivalent units
			Materials	Conversion
	Units completed and transfered out	6450000	6450000	6450000
	Work in Process, October 30	2400000	960000	1440000
	Equivalent units of Production		7410000	7890000
2		Whole units	Equivalent units
			Materials	Conversion
	Oprening Inventory	4000000	2000000	3200000
	Units completed and transfered out	2450000	2450000	2450000
	Work in Process, October 30	2400000	960000	1440000
	Equivalent units of Production		3410000	3890000