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The Mixing Department of Complete Foods had 62,000 units to account for in October. Of the 62,000 units, 38,000 units were completed and transferred to the next department, and 24,000 units were 20% complete. All of the materials are added at the beginning of the process. Conversion costs arc added evenly throughout the mixing process and the company uses the weighted-average method.

Required:
Compute the total equivalent units of production for direct materials and conversion costs for October.

Respuesta :

Kolawole845

Answer:

                                                 Equivalent units

Material                                                 62,000

Conversion cost                                    24,000

Explanation:

Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required is done in the period under consideration. So there is no separation of the completed units into opening inventory and fully worked.

Equivalent units = Degree of completion (%) × Number of units

Equivalent unit for Material

Item                                 unit                    Equivalent units

Transferred out             38,000 ×  100% = 38,000

Closing WIP                    24,000×  100% = 24,000

Equivalent unit of material                          62,000

The degree of completion for WIP is taken to be 100% because materials are always added at the beginning, therefore all the amount of raw material required is already imputed.

Equivalent unit for Conversion cost

Item                                 unit                    Equivalent units

Transferred out             38,000 ×  100% =      38,000

Closing WIP                    24,000×  20% =       4800

Equivalent unit of conversion                         42,800

                                                     Equivalent units

Material                                                 62,000

Conversion cost                                    24,000

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