EXERCISE 5 The following information is available for the ABC Co. for the month

Question

EXERCISE 5 The following information is available for the ABC Co. for the month of January. All materials are added at the start of production. All spoilage is abnormal and is detected by the final inspection at the end of the process Beginning work in process (80% complete) Ending work in process (55% complete) Beginning work-in-process costs 8,000 units 15,000 units Materials $14,000 38,200 Current costs Materials 50,750 173,130 Assume that ABC Co. uses the FIFO method Required 1. Calculate the equivalent units of production for materials and conversion cost:s

Explanation / Answer

Units both started and completed during the year.

16500

(24500-8000)

Particulrs transferred in direct material conversion Units in beginning 0 8000 8000 %of completed work 80 80 % of work completed this year 100% 20% 20% Equivalent units in beginning 1600 1600

Units both started and completed during the year.

16500

(24500-8000)

16500 16500 Units of ending wip 15000 15000 1500 %of completion 100% 55% 55% Equivalent ending units 15000 8250 8250 Equivalent units 31500 26350 26350

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