Question

Magic Company adds materials at the beginning of the process in Department A. The following information on physical units for Department A for the month of August is available: Work in process, August 1 (57% complete with respect to conversion) Started in August Completed Work in process, August 31 (78% complete with respect to conversion) 16, 100 121, 100 121, 100 16, 100 Required: a. Compute the equivalent units for materials costs and for conversion costs using the weighted-average method. Equivalent Units Materials Conversion costs b. Compute the equivalent units for materials costs and for conversion costs using the FIFO method. Equivalent Units Materials Conversion costs

Answer 1

Material Conversion Costs Equivalent Units 137,200 133,658 b. Material Conversion Costs Equivalent Units 121,100 124,481 Working Weighted-average method Equivalent Units Direct Materials Conversion Costs Physical Units Units to be accounted for: Work in process, Beginning Started in Production Total units to account for 16,100 121,100 137,200 Units account for: Completed and transferred out Work in process, Ending Total units accounted for 121,100 16,100 137,200 100% 100% 121,100 16,100 137,200 100% 78% 121,100 12,558 133,658 FIFO Physical Units Equivalent Units Direct Materials Conversion Costs 0% 100% 43% 100% 6,923 105,000 105,000 Units account for: Work in process. Beginning Started and completed in August Completed and Transferred Work in process, Ending Total units accounted for 16,100 105,000 121,100 16,100 137,200 100% 78% 16,100 121,100 12,558 124,481