Question

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119.(Appendix 6A) The Smith Company manufactures a product that goes through two departments prior to completion. The following information is available on work in one of these departments, the Forming Department, during March: Percentage Completed Units Materials Conversion Work in process, March 1 70,000 517 377 Started into production 460,000 Completed and transferred out 450,000 Work in process, March 31 80,000 7/8 5/8 Cost in the beginning work-in-process inventory and cost added during the month were as follows: Materials Conversion Work in process, March 1 $ 42,190 $ 38,000 Cost added during March $440,810 $ 394,000 The Forming Department is the first department in the production process; after forming has been completed, the units are transferred to the Finishing Department. Required: a) Assuming the company uses the weighted-average method, calculate the equivalent units and unit cost for materials and conversion costs, rounded to the nearest tenth of a cent. b) (Appendix 6A) Assuming the company uses the FIFO method, calculate the equivalent units and unit cost for materials and conversion costs, rounded to the nearest tenth of a cent.

Answer 1

the answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

1 Answer 2 Part 5) 3 4 Particulars 5 Units completed and transferred out 6 Units in ending Inventory 7 Total equivalent units Statement of Equivalent Units Weighted Average Physical Units % Completion Material % Completion Conversion Cost 450000 100 450000 100 450000 80000 7/8 70000 5/8 50000 530000 520000 500000 10 Statement of cost per equivalent units 11 Particulars 12 Cost of beginning inventory 42190 13 Cost incurred during the period 440810 14 Total cost 483000 15 No. of equivalent Units 520000 16 Cost per equivalent Unit 0.929 38000 394000 432000 500000 0.864 18 Thus the Final Answer 19 20 Equivalent units Weighted Average 21 Cost Per Equivalent Unit under weighted Average 22 Material 520000 0.929 Conversion Cost 500000 0.864

24 Part 6) 25 Statement of Equivalent Units FIFO Physical Units % Completion Material 70000 2/7 380000 100 % Completion Conversion Cost 20000 4/7 40000 380000 100 380000 27 Particulars 28 Units completed and transferred out 29 From Beginning inventory 30 From units started 31 Units in ending Inventory 32 Total equivalent units 80000 7/8 530000 70000 5/8 470000 50000 470000 34 Statement of cost per equivalent units 36 Particulars 37 Cost incurred during the period 440810 38 Total cost 440810 39 No. of equivalent Units 470000 40 Cost per equivalent Unit 0.938 41 42 Thus the Final Answer 43 Material 44 Equivalent units FIFO 470000 45 Cost Per Equivalent Unit under FIFO Method 0.938 394000 394000 470000 0.838 Conversion Cost L 470000 0.838