Question

The Polishing Department of Major Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process.

Production: Beginning inventory 1,580 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 41,000; ending inventory of 6,900 units 10% complete as to conversion costs.

Manufacturing costs: Beginning inventory costs, comprised of $20,100 of materials and $12,620 of conversion costs; materials costs added in Polishing during the month, $210,258; labor and overhead applied in Polishing during the month, $126,500 and $258,040, respectively.

The equivalent units of production: Materials( ) & Conversion Costs( )

Answer 1

Solution using Weighted average method

	Material	Conversion
Equivalent Units of Production	42,580	36,370

Working

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	35,680			100%	35,680	100%	35,680
Ending WIP	6,900			100%	6,900	10%	690
Total	42,580			Total	42,580	Total	36,370

Alternate solution using FIFO Method

	Material	Conversion
Equivalent Units of Production	41,000	35,896

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	1,580	100%	30%	0%	70%
Units introduced	41,000
Total units to be accounted for	42,580
Completed and Transferred unit	35,680	0%	0%	100%	100%
Ending WIP	6,900	0%	0%	100%	10%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	1,580	0%	-	70%	1,106
From units started/Introduced	34,100	100%	34,100	100%	34,100
Total	35,680		34,100		35,206
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	6,900	100%	6,900	10%	690
Total EUP	42,580		41,000		35,896