P1: Computation of Physical flow of units and equivalent units Jade Paint Inc. manufactures paint using two processes - Mixing and Canning . On March 1st, the company provided the following production data for the Mixing department: % of completion Units in gallon Direct Materials Conversion Beginning WIP 8,000 60% 40% Units started during the period 48,000 Units completed and transferred to the canning process: 50,000 fl. oz. 50,000 Ending WIP ? 80% 60% Required: a) Compute the units in the ending work-in-process inventory. b) Compute the equivalent units of production (EU) for direct materials and conversion using the weighted average method. Solution: a) Use Physical flow of units formula to compute Ending WIP. BWIP + US = UCTO + EWIP EWIP = BWIP + US - UCTO units b) Under WA method, computation of EU involves UCTO and EWIP. % of completion Equivalent Units Units in gallon Direct Materials Conversion Direct Materials Conversion UCTO (these are 100% completed) Ending WIP Total Equivalent units

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Chapter1: Financial Statements And Business Decisions

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P1:	Computation of Physical flow of units and equivalent units

	Jade Paint Inc. manufactures paint using two processes - Mixing and Canning .
	On March 1st, the company provided the following production data for the Mixing department:

			% of completion
		Units in gallon	Direct Materials	Conversion
	Beginning WIP	8,000	60%	40%
	Units started during the period	48,000
	Units completed and transferred to the canning process: 50,000 fl. oz.	50,000
	Ending WIP	?	80%	60%

Required:
a)	Compute the units in the ending work-in-process inventory.
b)	Compute the equivalent units of production (EU) for direct materials and conversion using the weighted average method.

Solution:
a)	Use Physical flow of units formula to compute Ending WIP.
	BWIP + US = UCTO + EWIP
	EWIP = BWIP + US - UCTO		units

b)	Under WA method, computation of EU involves UCTO and EWIP.

			% of completion	Equivalent Units
		Units in gallon	Direct Materials	Conversion	Direct Materials	Conversion
	UCTO (these are 100% completed)
	Ending WIP
	Total Equivalent units