Question

Exercise 16-11 (Part Level Submission) 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 1,570 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 46,000; ending inventory of 6,300 units 10% complete as to conversion costs. Manufacturing costs: Beginning inventory costs, comprised of $20,900 of materials and $64,690 of conversion costs; materials costs added in Polishing during the month, $218,377; labor and overhead applied in Polishing during the month, $126,400 and $257,240, respectively. Collapse question part (a) Compute the equivalent units of production for materials and conversion costs for the month of September.

Answer 1

Answer

• Only Requirement ‘a’ has been asked regarding Equivalent Units.
• Since, Question does not mention which method to use, Equivalent units calculated below are calculated using BOTH:
  #1 Weighted Average method, and
  #2 FIFO Method
• #1Weighted Average Method - Answer

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	41,270	100%	41,270	100%	41,270
Units of ENDING WIP	6,300	100%	6,300	10%	630
Equivalent Units of Production			47,570 = Answer		41,900 = Answer

OR

• #2 FIFO Method - Answer

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	6,300	100%	6,300	10%	630
Units STARTED & COMPLETED	39,700	100%	39,700	100%	39,700
Units of beginning WIP	1,570	0%	-	70% [30% already complete]	1,099
Equivalent Units of Production			46,000 = ANswer		41,429 = Answer

• Working

Units Reconciliation
Units to account for:
Beginning WIP	1,570
Units started this period	46,000
Total Units to account for	47,570
Total Units accounted for:
Completed & Transferred out [47570 – 6300]	41,270
Ending WIP	6,300
Total Units accounted for	47,570