Badgersize Company has the following information for its Forming Department for

Question

Badgersize Company has the following information for its Forming Department for the month of August: Work in Process Inventory, August 1: 20,000 units Direct materials: 100% complete $ 80,000 Conversion: 20% complete 24,000 Balance in work in process, August 1 $ 104,000 Units started during August 53,000 Units completed and transferred in August 59,000 Work in process (70% complete), August 31 ? Costs charged to Work in Process in August Direct materials $ 147,000 Conversion costs: Direct labor $ 104,000 Overhead applied 144,000 Total conversion $ 248,000 Assume materials are added at the start of processing. Instructions a. Calculate the equivalent units for the Forming Department for the month of August. b. Find the cost per equivalent unit of input resource. (Round your answers to 2 decimal places.)

Explanation / Answer

The costs per equivalent unit are used to value units in ending inventory and units that are transferred to the next department.as in question it is not clear wheather to compute using FIFO method or weighted avg method. it is calculated using FIFO method.

Formula

FIFO Method (a separate calculation is made for each cost category in each processing department)

Equivalent units of production = Equivalent units to complete beginning work in process inventory* + Units started and completed during the period + Equivalent units in ending work in process inventory

*Equivalent units to complete beginning work in process inventory = Units in beginning work in process inventory × ( 100% Percentage completion of beginning work in process inventory )

or the equivalent units of production can also be determined as follows:

Equivalent units of production = Units transferred out + Equivalent units in ending work in process inventory Equivalent units in beginning work in process inventory

Part A

Calculate the equivalent units for the Forming Department for the month of August

Material Conversion

To complete beginning work in process:

Materials: 20000units × (100% 100%)* . 0

Conversion: 20000 units × (100% 20%)* . 16000

Units started and completed during the period 59000 59000

Ending work in process: 11000*70% 7700

Equivalent units of production 59000 82700

Part B

cost per equivalent unit of input resource

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.