Question

Help Save Required information [The following information applies to the questions displayed below.] Pacific Ink had beginning work-in-process inventory of $762,960 on October 1. Of this amount, $313,920 was the cost of direct materials and $449,040 was the cost of conversion. The 57,000 units in the beginning inventory were 25 percent complete with respect to both direct materials and conversion costs. During October, 120,000 units were transferred out and 39,000 remained in ending inventory. The units in ending inventory were 75 percent complete with respect to direct materials and 35 percent complete with respect to conversion costs. Costs incurred during the period amounted to $2,956,500 for direct materials and $3,737,220 for conversion. Required: a. Compute the equivalent units for the materials and conversion cost calculations. b. Compute the cost per equivalent unit for direct materials and for conversion costs using the weighted-average method Complete this question by entering your answers in the tabs below. Required A Required B Compute the equivalent units for the materials and conversion cost calculations. Equivalent units for materials Equivalent units for conversion costs Required A Required B> Next> of 15 Prev 5 67 8

Answer 1

Answer

• Requirement 1 Answer (using BOTH – FIFO Method and Weighted Average Method, because methods to be used is not mentioned)
  CHOOSE ANSWERS from EITHER of methods as required by you.

--Weighted Average

Equivalent units for:
>Material = 149250
>Conversion Cost = 133650

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	120,000	100%	120,000	100%	120,000
Units of ENDING WIP	39,000	75%	29,250	35%	13,650
Equivalent Units of Production			149,250		133,650

--FIFO Method

Equivalent units for:
>Material = 135000
>Conversion Cost = 119400

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	39,000	75.0%	29,250	35.0%	13,650
Units STARTED & COMPLETED	63,000	100%	63,000	100%	63,000
Units of beginning WIP	57,000	75.00%	42,750	75.00%	42,750
Equivalent Units of Production			135,000		119,400

• Requirement 2

Cost per Equivalent unit

COST per EUP			Material		Conversion
Cost of Beginning WIP			$        313,920.00		$                                449,040.00
Cost incurred during the period			$    2,956,500.00		$                            3,737,220.00
Total Costs		Costs	$    3,270,420.00	Costs	$                            4,186,260.00
Equivalent units of production		EUP	149,250	EUP	133,650
Cost per EUP = ANSWER			$            21.91236 or $ 21.91		$                                   31.32256 or $ 31.32