Question

Exercise 6-28 Equivalent Units; Weighted-Average Method [LO 6-1, 6-2, 6-4]

Washington State Fisheries, Inc., processes salmon for various distributors. Two departments, processing and packaging, are involved. Data relating to tons of salmon sent to the processing department during May follow:

			Percent Completed
	Tons of Salmon		Direct Materials			Conversion
Work-in-process inventory, May 1	1,440		80	%		70	%
Work-in-Process inventory, May 31	2,120		50	%		30	%
Started processing during May	7,950

Required:

1. Calculate the number of tons completed and transferred out during the month.

2. Calculate the number of equivalent units for both direct materials and conversion for the month of May, assuming that the company uses the weighted-average method.

3. How would your answer in requirement 2 change if the percentage of completion in ending inventory were as follows: direct materials 30%, conversion 40%?

Answer 1

Solution 1:

Tons completed and transferred out during the month = Work-in-process inventory, May 1 + Started processing during May - Work-in-process inventory, May 31

= 1440 + 7950 - 2120 = 7270 tons

Solution 2:

Equivalent units of production (EUP) - Weighted Average method
	Units	%Material	EUP-Material	% Conversion	EUP- Conversion
Units transferred out	7270	100%	7270	100%	7270
Units of Ending work in process	2120	50%	1060	30%	636
Total Units	9390		8330		7906

Solution 3:

Equivalent units of production (EUP) - Weighted Average method
	Units	%Material	EUP-Material	% Conversion	EUP- Conversion
Units transferred out	7270	100%	7270	100%	7270
Units of Ending work in process	2120	30%	636	40%	848
Total Units	9390		7906		8118