Magic Company adds materials at the beginning of the process in Department A. The following information...

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Magic Company adds materials at the beginning of the process in Department A. The following information...

Magic Company adds materials at the beginning of the process in Department A. The following information on physical units for Department A for the month of August is available.

Work in process, August 1 (60% complete with respect to conversion) 72,000

Started in August 480,000

Completed 480,000

Work in process, August 31 (30% complete with respect to conversion) 72,000

Required:

a. Compute the equivalent units for materials costs and for conversion costs using the weighted-average method.

b. Compute the equivalent units for materials costs and for conversion costs using the FIFO method.

business accounting

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Answer 1

Answer #1

a) Equivalent unit : Weighted average

	Material	Conversion
Unit transferred out	480000	480000
Ending work in process	72000	72000*30% = 21600
Equivalent unit	552000	501600

b) Equivalent unit : FIFO

	Material	Conversion
Beginning work in process	0	72000*40% = 28800
Unit Started and completed	408000	408000
Ending work in process	72000	72000*30% = 21600
Equivalent unit	480000	458400

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Answer 2

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