Question

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During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 82,000 were in process in the production department at the beginning of April and 328,000 were started and completed in April. April's beginning inventory units were 70% complete with respect to materials and 30% complete with respect to conversion. At the end of April, 104,000 additional units were in process in the production department and were 85% complete with respect to materials and 35% complete with respect to conversion.

1. Compute the number of units transferred to finished goods.
2. Compute the number of equivalent units with respect to both materials used and conversion used in the production department for April using the weighted-average method.

Answer 1

2. Computation of No. of equivalent units (Weighted Average Method)

Equivalent units used = (Opening WIP*% of completion) + Units started & Completed + (Closing WIP*% of completion)

Equivalent units completed/ produced = (Opening WIP*% of completion) + Units started & Completed - (Closing WIP*% of completion)

(No. of units)

S.No	Particulars	Material	Conversion
1	Opening WIP	82,000*30% = 24,600	82,000*70%= 57,400
2	Units started & Completed	328,000*100% = 328,000	328,000*100% = 328,000
3	Closing WIP	104,000*85% = 88,400	104,000*35% = 36,400
	Total Equivalent units used in the production	441,000	421,800

1. Units transferred to finished goods

No. of units from Opening inventory + No.of units started and completed

= 82,000+ 328,000 = 410,000 units