Question

need help with direct material and conversion costs

E18-21 (similar to) Question Help Consider the following data for November 2017 from Walton Manufacturing Company, which makes sik pennants and uses a process-costing system. All direct materials are added at the beginning of the process, and conversion costs are added evenly during the process. Spoilage is detected upon inspection at the completion of the process. Spoiled units are disposed of at zero net disposal value. Waton Manufacturing Company uses the weighted-average method of process costing. E(Click the icon to view the data) Requirement Compute equivalent units for direct materials and conversion costs. Show physical units in the first column of your schedule.

Answer 1

Solution

Walton Manufacturing Co

Computation of equivalent units for direct materials and conversion costs:

Equivalent units for direct materials and conversion costs
	Physical Units (Step 1)	Equivalent Units (Step 2)
Flow of Production	Physical Units	Direct Materials	Conversion Costs
Work in process, beginning	1,000
Started during current period	10,150
To account for	11,150
Completed and transferred out during current period	9,000	9,000	9,000
Normal Spoilage	100	100	100
Abnormal spoilage	50	50	50
Work in process, ending	2,000	2,000	600
Accounted for	11,150
Equivalent units of work done to date		11,150	9,750

Notes:

Given units accounted for 11,150, therefore units started during current period = 11,150 – beg. Units 1,000 = 10,150

Degree of completion of normal spoilage in this department – materials 100%, conversion costs 100%.

Degree of completion of abnormal spoilage in this department – direct materials 100%; conversion costs 100%.

Degree of completion, ending work in process in this department – direct materials 100%; conversion costs 30%.