Question

Assignment Problem 1: ABC Company uses the FIFO method in its process costing system. The partment started the month with 6,000 units in its beginning work in process inventory that Were 20% complete with respect to conversion costs. An additional 74,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 8,000 units in the ending work in process inventory of the Assembly Department that were 60% complete with respect to conversion costs. Required: What were the equivalent units for conversion costs in the Assembly Department for the month?

Answer 1

Problem 1
ABC company uses FIFO Method of Inventory accounting
The assembly department started month with 6000 Units
Begining WIP - 20% complete with respect to conversion cost
Equivalent Unit Movement
Opening unit		6,000	Unit completed and Transferred		72,000
Unit transferred from
other department		74,000	Closing unit		8,000
Total		80,000	Total		80,000
FIFO method application					Equivalent unit
		Unit	Conversion %
Opening WIP		6,000	80%		4,800
Add- Started and Finished product		66,000	100%		66,000
(72000 Unit -6000 Unit)
Closing WIP		8,000	60%		4,800
( As per Question conversion % =60% )
Total Units		80,000			75,600

Problem 2

In April ,

One of the processing department at S company

Amnt$

opening WIP Inventory $

27,000

Add- cost added to the production( balancing Number)

2,70,000

Total Unit

2,97,000

Ending Work in process$

36,000

During the month , cost of unit transferred out

from the department

2,61,000

Total Unit

2,97,000

opening WIP Inventory $ 27000+ Cost added to the production

=

297000

( Closing WIP+ Cost of unit transferred out)

So Cost added to the production = $ 297000-$27000= $ 270,000

Total cost to be accounted

Amnt$

opening WIP Inventory $

27,000

Add- cost added to the production

2,70,000

Total cost to be accounted

2,97,000

Problem 3

Weighted Average Method

Weighted Average Method
Cooking   Depatment					Material	Conversion %	Conversion Unit
Transferred					17,100	100%	17,100
Add closing WIP					2,400	60%	1,440
Total Equivalent Unit					19,500		18,540
Opening WIP ( as per Question)					4,500
Unit Started ( As per Question)					15,000
Total Unit					19,500

Weighted Average Method
Packing Depatment
					Transferred	Material Unit	Conversion cost
Transferred Out					17,600	17,600	17,600
Closing WIP					500	400	400
Total Equivalent Unit					18,100	18,000	18,000
As above Total Equivalent Unit ( Transferred )					17,100
Add - opening WIP( as per Question)					1,000
Total Equivalent Unit					18,100

FIFO method

Cooking Depatment					Unit
Opening WIP(30% Complete conversion)					4,500
Unit started this period					15,000
Ending WIP ( 60% completeto be conversion))					2,400
FIFO Method
					Material Unit	Conversion	Conversion cost
Opening WIP						70%	3,150	(4500*70%)
Transferred from Packaging Deptt					12,600	100%	12,600
Ending WIP ( 60% completeto be conversion))					2,400	60%	1,440
Total Equivalent Unit					15,000		17,190

Packing Depatment
					Transferred	Material Unit	Conversion	Conversion cost
Opening WIP= Material Unit ==1000*10%						100	20%	200	(1000*20%)
Transferred from cooking					16,600	16,600		16,600
Closing WIP					500	400	80%	400
Total Equivalent Unit					17,100	17,100		17,200

Total Equivalent unit 17100 calculated as above .