Question

Holly Company has the following information for December 1 to December 31. All direct materials are 100% complete.

Work-in-Process Beginning balance December 310 units, 20% complete for conversion $ 38,750 Completed 910 units and transferred to finished goods inventory $149,240 Direct materials 83,700 Direct labor 52,700 Factory overhead Property taxes 8,200 Depreciation 37,500 Utilities 20,200 Indirect labor 6,200 Ending balance December 31, 410 units, 40% complete 42,230

Required: 1. Calculate equivalent units using the weighted-average and FIFO methods.

2. Use the given information to determine whether Holly Company is using the FIFO or weighted-average method. The beginning balance of WIP consists of $28,379 of direct materials and $10,371 of conversion costs. Weighted-average method FIFO method

Answer 1

ANSWER:-

calculation of equivalent unit - Weighted average Method	direct material	conversion
units completed	910	910
units in ending WIP	410	410
Percentage of completion	100%	40%
equivalent units of ending WIP	410	164
total equivalent units	1320	1074
calculation of equivalent unit - FIFO		direct material	conversion
units in beginning WIP	A	310	310
Percentage of completion	B	100%	20%
% completed during the period	C=100%-B	0%	80%
equivalent units of beginning WIP	D	0	248
units in ending WIP	E	410	410
Percentage of completion	F	100%	40%
equivalent units of ending WIP	G=E*F	410	164
units started and completed (800-200)	H	600	600
total equivalent units	D+G+H	1,010	764

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