Question

Required information [The following information applies to the questions displayed below.) During April, the first production department of a process manufacturing system completed its work on 310,000 units of a product and transferred them to the next department. Of these transferred units, 62,000 were in process in the production department at the beginning of April and 248,000 were started and completed in April. April's beginning inventory units were 70% complete with respect to materials and 30% complete with respect to conversion. At the end of April, 84,000 additional units were in process in the production department and were 90% complete with respect to materials and 40% complete with respect to conversion. Prepare the number of equivalent units with respect to both materials and conversion costs in the production department for April using the FIFO method. Equivalent Units of Production - FIFO Units % Materials EUP- Materials % Conversion EUP- Conversion Equivalent units of production

Answer 1

1 FIFO-Equivalent production Unit Reconcilation Beginning Work in Process Inventory Started this period Cost Charged to account for: Beginning Work in Process Inventory, Completed and Transferred out Ending Work in Process Inventory, Total units accounted for: 62,000 248,000 310,000 62,000 164,000 Balance 84,000 310,000 a. Equivalent units of production Beginning Work in Process Inventory, Completed and Transferred out Ending Work in Process Inventory, Total Equivalent Units Units 62,000 164,000 84,000 310,000 % of Material EUP-Material%Conversion EUP -Conversion 30% 18,600 70% 43,400 100% 164,000 100% 164,000 90% 75,600 40% 33,600 258,200 241,000

Workings:

*Beginning WIP:

% Material = 70% completed in prior period; 30% is relevant for this current period.

% Conversion = 30% completed in prior period; 70% is relevant for this current period.

Completed: 100% completed in this current period.

*Ending WIP:

% Material = 90% is relevant for this current period.

% Conversion = 40% is relevant for this current period.

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*FIFO:
*It assigns the cost of the previous period's equivalent units in beginning WIP to the first units completed and transferred out of the process, and assigns the cost of equivalent units worked on during the current period first to complete beginning inventory, Then to start and complete new units, and finally to units in Ending WIP inventory.
*FIFO costing method is that work done on beginning inventory before the current period is kept
separate from work done in the current period.
*Equivalent units in Beginning WIP + Equivalent units of work done in current period = Equivalent units in Beginning WIP + Equivalent units completed and transferred out in current period + Equivalent units in Ending WIP.

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