Started during march total units to account for 20000

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Unformatted text preview: otal units to account for 20,000 30,000 50,000 10% Units completed and transferred W ork in process, March 31 Total units accounted for Total equivalent units 40,000 10,000 50,000 100% 50% Equivalent Units Direct Material Conversion 50% of 10,000 units 40,000 10,000 40,000 5,000 50,000 45,000 Beginning inventory % is not used in weighted-average method. Wang 2013 22 Production Report Example Calculation of Equivalent Units Physical Units Conversion Percentage Complete Work in process, March 1 Units started during March Total units to account for 20,000 30,000 50,000 10% Units completed and transferred W ork in process, March 31 Total units accounted for Total equivalent units 40,000 10,000 50,000 100% 50% Equivalent Units Direct Material Conversion Wang 2013 100% of 10,000 units, all material added at beginning 40,000 10,000 40,000 5,000 50,000 45,000 23 Production Report Example Computation of unit costs Direct Material Work in Process, March 1 Costs incurred during March Total costs to account for $ 50,000 90,000 $ 140,000 Equivalent units Cost per equivalent unit 50,000 $ 2.80 Conversion $ 7,200 193,500 $ 200,700 $ 45,000 4.46 $140,000 ÷ 50,000 equivalent units Total $ 57,200 283,500 $ 340,700 I/P costs is same as O/P costs $ 7.26 $2.80 + $4.46 $200,700 ÷ 45,000 equivalent units Wang 2013 24 Production Report Example Analysis of total costs Cost of goods completed and transferred during March 40,000 units x $7.26 per equivalent unit Costs remaining in work-in-process on March 31 Direct Material: 10,000 equivalent units x $2.80 per equivalent unit $ 290,400 $ 28,000 Convserion: 5,000 equivalent units x $4.46 per equivalent unit Total cost of March 31 work-in-process Total costs accounted for All costs accounted for 22,300 50,300 $ 340,700 I/P costs is same as O/P costs Wang 2013 25 Equivalent Units of Production-FIFO Method • The First-in, First-out Method – Compute equivalent units on a first-in, first-out basis • Assuming that the beginning work in process is completed before new work is done – The FIFO method differs from the weighted-average Equivalent units are the sum of: - Units finished in beg. WIP method in two ways: - Units started & completed...
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