Required: 1. Prepare a schedule analysing the physical flow of units and calculating the equivalent units of both direct material and conversion. Use weighted average process costing. 2. How would your approach differ using the FIFO method?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Physical flow and equivalent units including spoilage:
manufacturer Proudly Paper Corporation manufactures cardboard boxes. In the year just
completed the following results
Units
Percentage of completion
with respect to conversion
Work in process, 1 January
25000
50%
Work in process, 31 Disember 20000
40%
During the year, 100 000 boxes were started in production. Of these, 10000 were rejected at the
quality Inspection process, which occurs two-thirds of the way through the production process.
All materials are added at the beginning of the production process and conversion costs are
incurred uniformly throughout the process.
Required:
1. Prepare a schedule analysing the physical flow of units and calculating the equivalent units of
both direct material and conversion. Use weighted average process costing.
2. How would your approach differ using the FIFO method?
Transcribed Image Text:Physical flow and equivalent units including spoilage: manufacturer Proudly Paper Corporation manufactures cardboard boxes. In the year just completed the following results Units Percentage of completion with respect to conversion Work in process, 1 January 25000 50% Work in process, 31 Disember 20000 40% During the year, 100 000 boxes were started in production. Of these, 10000 were rejected at the quality Inspection process, which occurs two-thirds of the way through the production process. All materials are added at the beginning of the production process and conversion costs are incurred uniformly throughout the process. Required: 1. Prepare a schedule analysing the physical flow of units and calculating the equivalent units of both direct material and conversion. Use weighted average process costing. 2. How would your approach differ using the FIFO method?
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