Question

2-02 Saved Help Weatherly Lumber Company processes wood pulp for manufacturing various paper products. The company employs a process costing system for its manufacturing operations. All direct materials are added at the beginning of the process, and conversion costs are incurred uniformly throughout the process. This is the company's production schedule for May: Percent Completed Tons of Pulp Materials Conversion Work-in-Process Inventory, May 1 5,000 1000 508 Started during May 12,000 Units to account for 17,000 Units from beginning Work-in-process, which were completed and transferred out during May Started and completed during May Work-in-Process Inventory, May 31 Total units accounted for 5,000 7,200 4,800 17,000 1000 500 The following cost data are available: Work-in-Process Inventory, May 1 Direct materials Conversion Costs incurred during May Direct materials Conversion $ 70, 850 107,586 188,400 244, 420 Required: 1. Calculate the equivalent units of direct materials and conversion during May. Use the FIFO method. 2. Calculate the cost per equivalent unit for both direct materials and conversion during May. Use the FIFO method Complete this question by entering your answers in the tabs below.

Answer 1

Solution 1:

Weatherly Lumber Company
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	5000
Units started this period	12000
Total unit to be accounted for	17000
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 0% Conversion - 50%	5000	0	2500
Started and completed currently	7200	7200	7200
Transferred to finished goods	12200	7200	9700
Units in ending WIP Material - 100% Conversion - 50%	4800	4800	2400
Total units accounted for	17000	12000	12100

Solution 2:

Weatherly Lumber Company
Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$432,820.00	$188,400.00	$244,420.00
Equivalent units		12000	12100
Cost per equivalent unit		$15.70	$20.20