Nelson Corporation Nelson Corporation has the following information available fo

Question

Nelson Corporation Nelson Corporation has the following information available for May of the current year: Beginning Work in Process Inventory 10,000 units 120,000 units (25% complete as to conversion) Started Ending Work in Process Inventory (30% complete as to conversion) 30,000 units Beginning Work in Process Inventory Costs: Material Conversion $ 2,100 2,030 Current Period Costs: 33, 000 109, 695 Material Conversion All material is added at the start of production and all products completed are transferred out. 1. Calculate the total equivalent units of production (Total EUP) using the (a) FIFO and (b) weighted average method 2. Calculate cost per equivalent unit using the (a) FIFO and (b) weighted average method.

Explanation / Answer

Answer 1 Calculation of total equivalent units of production using the FIFO method Physical Units % Complete with respect to Materials Equivalent Units for Materials % Complete with respect to Conversion Equivalent Units for Conversion Beginning work in process 10000 75% 7500 Started and completed 90000 100% 90000 100% 90000 Ending work in process 30000 100% 30000 30% 9000 Equivalent Units 120000 106500 Calculation of total equivalent units of production using the Weighted Average method Physical Units % Complete with respect to Materials Equivalent Units for Materials % Complete with respect to Conversion Equivalent Units for Conversion Units completed and transferred 100000 100% 100000 100% 100000 Ending work in process 30000 100% 30000 30% 9000 Equivalent Units 130000 109000 Answer 2 Calculation of cost per equivalent units using FIFO Material Conversion Cost added during period $33,000.00 $109,695.00 / Equivalent Units 120000 106500 Cost per equivalent unit $0.275 $1.030 Calculation of cost per equivalent units using Weighted Average method Material Conversion Beginning work in process $2,100.00 $2,030.00 Cost added during period $33,000.00 $109,695.00 Total cost to account for $35,100.00 $111,725.00 / Equivalent Units 130000 109000 Cost per equivalent unit $0.254 $1.006

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