Question

Holly Company has the following information for December 1 to December 31. All direct materials are 100% complete.

Work-in-Process
Beginning balance     December 200 units, 20%     complete for conversion	$	14,000	Completed 800 units and transferred to finished goods inventory	$131,182
Direct materials		54,000
Direct labor		34,000
Factory overhead
Property taxes		6,000
Depreciation		32,000
Utilities		18,000
Indirect labor		4,000
Ending balance December 31,      300 units, 40% complete		30,818

Required:

Calculate equivalent units using the weighted-average and FIFO methods.

Weighted FIFO

Materials:

Conversion:

Answer 1

Solution:

calculation of equivalent unit - Weighted average Method	direct material	conversion
units completed	800	800
units in ending WIP	300	300
Percentage of completion	100%	40%
equivalent units of ending WIP	300	120
total equivalent units	1100	920
calculation of equivalent unit - FIFO		direct material	conversion
units in beginning WIP	A	200	200
Percentage of completion	B	100%	20%
% completed during the period	C=100%-B	0%	80%
equivalent units of beginning WIP	D	0	160
units in ending WIP	E	300	300
Percentage of completion	F	100%	40%
equivalent units of ending WIP	G=E*F	300	120
units started and completed (800-200)	H	600	600
total equivalent units	D+G+H	900	880