Understanding units started and completed i beginning

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Understanding Units Started and Completed (I)BeginningWork in Process300 Units40% CompleteEndingWork in Process900 Units60% Complete6,000 Units Started5,400 Units Completed5,100 Units Startedand CompletedMaterials5,400 Units Completed
Understanding Units Started and Completed (II)6,000 Units Started5,400 Units Completed5,100 Units Startedand CompletedBeginningWork in Process300 Units20%CompleteEndingWork in Process900 Units30%CompleteConversion
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Process Costing under Weighted Average Method (WAM)The WAM method slightly simplifies the calculation of equivalent unitsBeginning inventory is ignored in the calculation of equivalent unitsThis causes very small differences in the calculation of costs transferred out and WIP1If prices are rising the WAM method is slightly more conservative
Example of Process CostingConsider a company Smith Co which reports the following for the Assembly Department for the month of JunePercent CompletedUnitsMaterialsConversionWork in process, June 130040%20%Cost of beginning inventory$6,119$3,920Units started into production in June6,000Costs added during June$118,621$81,130Units completed and transferred out5,400of Department A during JuneWork in process, June 3090060%30%
The calculations depend on the methodMethodWAMFIFOApplicable eq units of productionAll units completed + equivalent units in endinginventoryUnits based on work doneApplicable CostsCosts in beginninginventory + costs added to departmentCosts added to department
Calculation of Equivalent units under WAM - SMITHMATERIALSThe beginning WIP is not included in the calculation5400 units were transferred outThe ending WIP (900 units) is 60% complete 540 equnitsEquivalent units = 5,940CONVERSIONThe beginning WIP is not included in the calculation5400 units were transferred outThe ending WIP (900 units) is 30% complete 270 equnitsEquivalent units = 5,670Calculated as Units transferred out + Units in ending WIP
Quick CheckAlberts Inc began the current month with 4,000 units 75% complete. Alberts started 15,000 units and completed 14,000 units, leaving 5,000 units in process 30% complete. How many equivalent units of production did Alberts have for the period?
Calculation of Equivalent units under WAM - SMITHMATERIALSThe beginning WIP is not included in the calculation5400 units were transferred outThe ending WIP (900 units) is 60% complete 540 equnitsEquivalent units = 5,940CONVERSIONThe beginning WIP is not included in the calculation5400 units were transferred outThe ending WIP (900 units) is 30% complete 270 equnitsEquivalent units = 5,670Calculated as Units transferred out + Units in ending WIP

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