P1: Computation of Physical flow of units and equivalent units Jade Paint Inc. manufactures paint using two processes - Mixing and Canning . On March 1st, the company provided the following production data for the Mixing department: % of completion Units in gallon Direct Materials Conversion Beginning WIP 8,000 60% 40% Units started during the period 48,000 Units completed and transferred to the canning process: 50,000 fl. oz. 50,000 Ending WIP ? 80% 60% Required: a) Compute the units in the ending work-in-process inventory. b) Compute the equivalent units of production (EU) for direct materials and conversion using the weighted average method. Solution: a) Use Physical flow of units formula to compute Ending WIP. BWIP + US = UCTO + EWIP EWIP = BWIP + US - UCTO units b) Under WA method, computation of EU involves UCTO and EWIP. % of completion Equivalent Units Units in gallon Direct Materials Conversion Direct Materials Conversion UCTO (these are 100% completed) Ending WIP Total Equivalent units
P1: Computation of Physical flow of units and equivalent units Jade Paint Inc. manufactures paint using two processes - Mixing and Canning . On March 1st, the company provided the following production data for the Mixing department: % of completion Units in gallon Direct Materials Conversion Beginning WIP 8,000 60% 40% Units started during the period 48,000 Units completed and transferred to the canning process: 50,000 fl. oz. 50,000 Ending WIP ? 80% 60% Required: a) Compute the units in the ending work-in-process inventory. b) Compute the equivalent units of production (EU) for direct materials and conversion using the weighted average method. Solution: a) Use Physical flow of units formula to compute Ending WIP. BWIP + US = UCTO + EWIP EWIP = BWIP + US - UCTO units b) Under WA method, computation of EU involves UCTO and EWIP. % of completion Equivalent Units Units in gallon Direct Materials Conversion Direct Materials Conversion UCTO (these are 100% completed) Ending WIP Total Equivalent units
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter6: Process Costing
Section: Chapter Questions
Problem 16E: Heap Company manufactures a product that passes through two processes: Fabrication and Assembly. The...
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Question
P1: | Computation of Physical flow of units and equivalent units | |||||
Jade Paint Inc. manufactures paint using two processes - Mixing and Canning . | ||||||
On March 1st, the company provided the following production data for the Mixing department: | ||||||
% of completion | ||||||
Units in gallon | Direct Materials | Conversion | ||||
Beginning WIP | 8,000 | 60% | 40% | |||
Units started during the period | 48,000 | |||||
Units completed and transferred to the canning process: 50,000 fl. oz. | 50,000 | |||||
Ending WIP | ? | 80% | 60% | |||
Required: | ||||||
a) | Compute the units in the ending work-in-process inventory. | |||||
b) | Compute the equivalent units of production (EU) for direct materials and conversion using the weighted average method. | |||||
Solution: | ||||||
a) | Use Physical flow of units formula to compute Ending WIP. | |||||
BWIP + US = UCTO + EWIP | ||||||
EWIP = BWIP + US - UCTO | units | |||||
b) | Under WA method, computation of EU involves UCTO and EWIP. | |||||
% of completion | Equivalent Units | |||||
Units in gallon | Direct Materials | Conversion | Direct Materials | Conversion | ||
UCTO (these are 100% completed) | ||||||
Ending WIP | ||||||
Total Equivalent units |
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