Question

Highlands Company uses the FIFO method in its process costing system. It processes wood pulp for various manufacturers of paper products. Data relating to tons of pulp processed during June are provided below:  

		Percent Completed
	Tons of Pulp	Materials		Labor and Overhead
Work in process, June 1	20,900	87	%	81	%
Work in process, June 30	28,700	69	%	42	%
Started into production during June	191,700

Required:

1. Compute the number of tons of pulp completed and transferred out during June.

2. Compute the equivalent units of production for materials and for labor and overhead for June.

Answer 1

1) Calculation of number of tons of pulp completed & transferred
particulars			amount
Work in process june 1			$           20,900.00
Add: Started in production june			$        1,91,700.00
less: Work in process june 30			$           28,700.00
tons completed & transferred			$        1,83,900.00
2) calculation of equivalent unit of production
Particulars		Material	Labour & OH
WIP begininng		$         2,717.00	$              3,971.00
Unit completed		$   1,63,000.00	$        1,63,000.00
WIP ending		$      19,803.00	$           12,054.00
equivalent unit of production		$   1,85,520.00	$        1,79,025.00
Working
WIP - beginning		20900*13%	20900*19%
unit completed		183900-20900	183900-20900
WIP - ending		28700*69%	28700*42%