Kay Company employs a process cost system for its manufacturing operations. l di

Question

Kay Company employs a process cost system for its manufacturing operations. l direct materlasion added at the beginning of the process and conversion costs are added uniformly. Kay's production quantity schedule and costs for November are reproduced below for the first stage of processing: Units Completion 100% 100% Cost Materials Conversion Materials Conversion Beginning work-in-Process | Units Started & Completed 2,500 Ending work-in-Process | S500 $1,000 $3,500 $5,000 500 | 50% | 1,000| | 25% Required (show work for partial credit): 1) Calculate the equivalent completed units for FIFO 2) Calculate the equivalent completed units for weighted average 3) Calculate the cost per equivalent completed unit for FIFO 4) 5) Calculate the ending work-in-process inventory for FIFO 6) 7) 8) Calculate the cost per equivalent completed unit for weighted average Calculate the ending work-in-process inventory for weighted average Calculate the total finished goods for FIFO Calculate the total finished goods for weighted average

Explanation / Answer

Req 1: Equivalent units under FIFO Equivalent units Material Conversion Units completed of opening WIP 500 units 0 250 Units Started and completed 2500 units 2500 2500 Ending Work in process 1000 units 1000 250 Total Eq units 3500 3000 Req 2: Equivalent units under Weighted Average Equivalent units Material Conversion Total Completed Units (500+2500) 3000 Units 3000 3000 Ending Work in process 1000 units 1000 250 Total Eq units 4000 3250 Req 3: Cost per equivalent unit under FIFO Material Conversion Total Current cost incurred in $ 3500 5000 Equivalent units as computed above 3500 3000 Cost per equivalent unit(Cost/ Equiv. Units) 1 1.67 Therefore, cost per completed unit under FIFO is $ 2.67 per unit (i.e. 1+1.67) Req 4: Cost per equivalent unit under Weighted Material Conversion Cost of Beginning Work in process 500 1000 Total Current cost incurred in $ 3500 5000 Total Cost incurred 4000 6000 Equivalent units as computed above 4000 3250 Cost per Equivalent unit (Total cost / Equivalent units) 1 1.85 Therefore, cost per completed unit under Weighted average is $ 2.85 per unit (i.e. 1+1.85)

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