All other manufacturing inputs are added uniformly a

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Unformatted text preview: e added uniformly. a. Beginning work in process: 100,000 pounds, 40% completed with respect to conversion costs. The costs assigned to this work are: Materials $ 20,000 Labor Overhead b. c. d. 10,000 30,000 Ending work in process: 50,000 pounds, 60% completed with respect to conversion costs. Units completed and transferred out: 370,000 pounds. The following costs were added during the period: Materials $ 211,000 Labor 100,000 Overhead Wang 2013 In exams, might be given total conversion cost or a breakdown of the total conversion cost 270,000 30 Equivalent Units of Production-FIFO Method • Compute the physical flow: Units to account for: Units in beginning work in process Units started Total units to account for Given total have Wang 2013 270,000 100,000 figure out the break down Units accounted for: Units completed and transferred out: Started and completed From beginning work in process Units in ending work in process Total units accounted for 100,000 320,000 420,000 370,000 50,000 420,000 31 Equivalent Units of Production-FIFO Method • Calculate equivalent units Materials Units in Beginning WIP * Fraction complete: Conversion (100,000 * (1 - 40%)) Units started and completed Units in Ending WIP * Fraction complete: Materials (50,000 * 100%) Conversion (50,000 * 60%) Equivalent units of output • Summarize total costs Beginning WIP Inventory Costs added during June Total costs to account for Conversion Costs 0 270,000 60,000 270,000 For materials, there are only 2 units, but for conversion, there are 3 50,000 30,000 360,000 320,000 Materials Total Beg. WIP Inventory does not participate in cost allocation Materials $ 0 211,000 211,000 Conversion Costs $ 0 370,000 370,000 Total $ 60,000 581,000 641,000 $ 20,000 Labor 10,000 Overhead 30,000 Total 60,000 100,000 Overhead 270,000 Total Wang 2013 Labor 370,000 32 Equivalent Units of Production-FIFO Method • Calculate cost per equivalent unit Total costs to account for Equivalent units of output Cost per equivalent unit Materials $ 211,000 320,000 $0.659/unit* Conversion Costs Total $ 370,000 360,000 $1.028/unit* $1.687/u...
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This document was uploaded on 03/06/2014.

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