During August, the production department of a process manufacturing system compl

ID: 2481189 • Letter: D

Question

During August, the production department of a process manufacturing system completes a number of units of a product and transferred them to finished goods. Of these transferred units, 75,000 were in process in the production department at the beginning of August and 387,000 were started and completed in August. August's beginning inventory units were 60% compete with respect to materials and 40% complete with respect to labor. At the end of August, 64,000 additional units were in process in the production department and were 80% complete with respect to materials and 30% complete with respect to labor. a) Compute the number of units transferred to finished goods. b)Compute the number of equivalent units with respect to both materials used and labor used in the production department for August using the weighted-average method. During August, the production department of a process manufacturing system completes a number of units of a product and transferred them to finished goods. Of these transferred units, 75,000 were in process in the production department at the beginning of August and 387,000 were started and completed in August. August's beginning inventory units were 60% compete with respect to materials and 40% complete with respect to labor. At the end of August, 64,000 additional units were in process in the production department and were 80% complete with respect to materials and 30% complete with respect to labor. a) Compute the number of units transferred to finished goods. b)Compute the number of equivalent units with respect to both materials used and labor used in the production department for August using the weighted-average method.

Explanation / Answer

a)The number of units transferred to finished goods:

Finished Goods = Opening Stock+Processed during the period-Closing Stock

=75,000 +387000-64000 =398000

b)The number of equivalent units with respect to both materials used and labor used in the production department for August using the weighted-average method:

Equivalent units wrt Material:
In Opening Stock=75000*60/100 =45000

Processed during th e month =387000

Closing Stock =64000*80/100 =51200

Total =45000+387000+51200=483200

Equivalent units wrt Labor:

Opening Stock =75000*40/100=30000

Processed during he month=387000

Closing Stock=64000*30/100=19200

Total= 30000+387000+19200=436200