Question

Department G had 3,600 units, 40% completed at the beginning of the period, 12,000 units were completed during the period, 2,000 units were 20% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period: Work in process, beginning of period $ 60,000 Costs added during period: Direct materials (10,400 at $9.8365) 102,300 Direct labor 79,800 Factory overhead 25,200 Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, the equivalent units for materials and conversion costs, respectively, are

Answer 1

Answer:

Equivalent Units Materials    10400      

  Equivalent Units  Conversion 10960    

Cost Per Equivalent Unit   Materials      $9.8365

Cost Per Equivalent Unit D.  Labor      $ 7.2810

Cost Per Equivalent Unit    FOH     $ 2.2992

Explanation:

Particulars       Units        % of Completion               Equivalent Units

                                      Materials Conversion      Materials Conversion

Complete     12000        100          100                12000         12000

Add EWIP     2000        100           20                 2000             400

Less BWIP    3600        100           40                 3600            1440        

Equivalent Units                                                  10400         10960    

In FIFO as the name suggests we take out the units first completed. So we deduct the Beginning Work in Process (BWIP) from the sum of completed units and ending work in process (EWIP).

Costs added during period: Direct materials  Direct labor  Factory overhead                          

                                   (10,400 at $9.8365)

                                                102,300          79,800          25,200

Equivalent Unit                         10400           10960           10960

Cost Per Equivalent Unit         $9.8365        7.2810          2.2992