Question

Jackson Products produces a barbeque sauce using three departments: Cooking, Mixing, and Bottling. In the Cooking Department, all materials are added at the beginning of the process. Output is measured in ounces. The production data for July are as follows:
Production:
Units in process, July 1, 60% complete* 10,000
Units completed and transferred out 80,000
Units in process, July 31, 80% complete* 15,000
* With respect to conversion costs.

Required:
a. Prepare a physical flow schedule for July.
b. Prepare an equivalent units schedule for July using the FIFO method.

Answer 1

Answer:

Physical Flow units 105000 ounces

FIFO Equivalent Units = Materials  85000 and Conversion 86000 ounces

Explanation:

Jackson Products

Physical flow Schedule

For the month of  July.

Units to account For

BWIP  60 % complete             10,000

Units Started                           95000

Total units to account for       105000

Units accounted For

Units completed and Transferred out     80,000

BWIP                                                           10000

EWIP                                                           15000    

Total Units accounted For                        105,000  

Jackson Products

Equivalent Units Schedule

For the month of  July.

Particulars         Units          % OF Completion            Equivalent Units

                                         Materials   Conversion      Materials   Conversion

Units Started &

Completed                       100            100                 80000          80000

EWIP                                 100            80                   15000        12000  

Less Beg. WIP                  100             60                   10,000        6000  

Total Equivalent Units                                               85000       86000

The difference between Weighted and FIFO Equivalent units is that FIFO accounts only for the current units . Thus the beginning inventory is deducted from the Total of completed and ending units.

Explanation: