Question

Exer E3-5 Th Shady Company, materials are entered at the beginning of each process. process inventories, with the percentage of work done on conversion cos and equivalent u production. and produc- for its Sterilizing Department in selected months during 2017 are as follows. (LO 3, 4), AP Beginning Work in Process Ending Work in Process Conversion Units Month Units Cost% Cost Transferred Out Units January0 March May July 1,000 14,000 10,000 3,000 7,000 1,500 30 80 40 Instructions (a) Compute the physical units for January and May (b) Compute the equivalent units of production for (1) materials and (2) conversion costs for each month.

Answer 1

Answer:

1. Physical units for january and may
	january	may
Units to be accounted for:
Beginning work in process	0	0
Started into the production (11000 +2000) & (14000+7000)	13,000	21,000
Total units	13,000	21,000
Units to be accounted for:
Transferred out	11,000	14,000
ending work in process	2,000	7,000
Total units	13,000	21,000

2. Equivalent units of production for material and conversion cost of each month
Equivalent units of production for material :
100%* units transferred out + 100% * ending work in process equivalent units	Units
january (11000 + 2000 )	13,000
march (12000 + 3000 )	15,000
may (14000 + 7000 )	21,000
July (10000 + 1500 )	11,500
Equivalent units of production for conversion cost :
100%* units transferred out + conversion rate * ending work in process equivalent units	Units
january (11000 + (2000 *60%) )	12,200
march (12000 + (3000 *30%) )	12,900
may (14000 + (7000 *80%) )	19,600
July (10000 + (1500*40%) )	10,600