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Determine the equivalent units

Determine the equivalent units

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vishnu 

Gamma, Inc. manufactures a product that passes through two production processes. A quantity schedule for a recent month for the first process follows: Quantity Schedule Units to be accounted for: Work in process, May 1 (70% materials, 60% conversion cost added last month) 40,000 Started into production Total units 160,000 200,000 Costs in the beginning work-in-process inventory of the first processing department were materials, $7,000, and conversion cost, $18,000. Costs added during the month were materials, $60,000, and conversion cost, $360,000. Required: 1. Assume that the company uses the weighted average cost method of accounting for units and costs. Determine the equivalent units for the month for the first process. Quantity Schedule Equivalent Units (EU) Materials Conversion Units accounted for as follows: Transferred to the next process 180,000 200,000 184,000 Work in process, May 31 (all materials, 60% conversion 20.000 33,000 cost added this month) 80,000 Total units and equivalent units of production 200,000 233,000 264,000
Transcribed Image Text:Gamma, Inc. manufactures a product that passes through two production processes. A quantity schedule for a recent month for the first process follows: Quantity Schedule Units to be accounted for: Work in process, May 1 (70% materials, 60% conversion cost added last month) 40,000 Started into production Total units 160,000 200,000 Costs in the beginning work-in-process inventory of the first processing department were materials, $7,000, and conversion cost, $18,000. Costs added during the month were materials, $60,000, and conversion cost, $360,000. Required: 1. Assume that the company uses the weighted average cost method of accounting for units and costs. Determine the equivalent units for the month for the first process. Quantity Schedule Equivalent Units (EU) Materials Conversion Units accounted for as follows: Transferred to the next process 180,000 200,000 184,000 Work in process, May 31 (all materials, 60% conversion 20.000 33,000 cost added this month) 80,000 Total units and equivalent units of production 200,000 233,000 264,000
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