Question

Rainbow Glass Company manufactures decorative glass products. The firm employs a process-costing system for its manufacturing operations. All direct materials are added at the beginning of the process, and conversion costs are incurred uniformly throughout the process. The company’s production schedule for October follows:

	Units
Work in process on October 1 (65% complete as to conversion)	5,400
Units started during October	8,600
Total units to account for	14,000
Units from beginning work in process, which were completed and transferred out during October	5,400
Units started and completed during October	5,800
Work in process on October 31 (45% complete as to conversion)	2,800
Total units accounted for	14,000

Required:

Calculate each of the following amounts using weighted-average process costing.

1. Equivalent units of direct material during October.

2. Equivalent units of conversion activity during October.

Answer 1

Ans.

CALCULATION OF EQUIVALENT UNITS OF DIRECT MATERIAL & CONVERSION ACTIVITY OF RAINBOW GLASS COMPANY BY WEIGHTED AVERAGE METHOD

	UNITS	MATERIALS	CONVERSION	DIRECT MATERIAL	CONVERSION
Work in process on Oct	5,400	100%	65%	5,400	3,510
Units started during Oct	8,600
Total units to account for	14,000
Units completed & transferred out during Oct(5,800 + 5,400)	11,200	100%	100%	11,200	11,200
Work in process 31 Oct	2,800	100%	45%	2,800	1,260
Total equivalent units for Oct				14,000	12,460