Question

Work in Process Inventory, August 1 20,000 units Direct materials: 100% complete $80,000 24,000 104,000 45,000 Conversion: 20% complete Balance in work in process, August 1 $ Units started during August Units completed and transferred in August work in process (70% complete), August 31 Costs charged to Work in Process in 57,000 7 August 166,000 Direct materials Conversion costs Direct labor Overhead applied 104,000 142,000 246,000 Total conversion Assume materials are added at the start of processing Instructions a. Calculate the equivalent units for the Forming Department for the month of August. rect Conversion Materials Equivalent units b. Find the cost per equivalent unit of input resource. (Round your answers to 2 decimal places.) rect Conversion Materials Cost per equivalent unit

Answer 1

Answer

• All working forms part of the answer
• Requirement ‘a’

EUP - Weighted Average Method	Units	% Material	Direct Materials	% Conversion	Conversion
Units TRANSFERRED	57,000	100%	57,000	100%	57,000
Units of ENDING WIP [20000 + 45000 – 45000]	8,000	100%	8,000	70%	5,600
Equivalent Units of Production			65,000 = Answer		62,600 = Answer

• Requirement ‘b’

COST per EUP			Direct Material		Conversion
Cost of Beginning WIP			$          80,000.00		$                                  24,000.00
Cost incurred during the period			$        166,000.00		$                                246,000.00
Total Costs		Costs	$        246,000.00	Costs	$                                270,000.00
Equivalent units of production		EUP	65,000	EUP	62,600
Cost per EUP = Answer			$              3.78 = Answer		$                                      4.31 = Answer

• NOTE: The above answers are based on Weighted Average Method.
  If answers are required by FIFO Method, please let me know through comments.