Question

Blue Company production starts in Department 1. The following data is available for August Unit WIP,...

Blue Company production starts in Department 1. The following data is available for August

Unit WIP, August 1 (50% completed) --------------- 40,000

Units started in August -------------------------------- 240,000

Units WIP, August 31 (60% completed) ------------ 25,000

Materials are added at the beginning of the process in Department

Using the average cost method, what are the equivalent units of production for the month of August (Materials)?

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Answer #1

Calculation of Equivalent units of production for Materials( Average method)

Units Account for Physical units Materials
Units in WIP, August 1 40,000
Units started 240,000
Total units account for 280,000
Units to be accounted for
Units Completed and transferred out 255,000 255,000
Units in Ending Work-in-process, August 31(25,000×60%) 25,000 15,000
Equivalent Units 280,000 270,000

Equivalent Units of production for materials =270,000 units

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