Scribd
Upload
4 views

New Microsoft Word Document (2)

The document outlines the calculation of Equivalent Units of Production (EUP) for materials and conversion costs, providing specific formulas and data for various scenarios. It details the steps to calculate physical units to be accounted for, unit materials cost, and total cost assignable to ending work in process (WIP) inventory. The final answers for EUP and costs are provided, confirming the calculations for materials and conversion costs.

Uploaded by

hamse mohamed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
4 views

New Microsoft Word Document (2)

The document outlines the calculation of Equivalent Units of Production (EUP) for materials and conversion costs, providing specific formulas and data for various scenarios. It details the steps to calculate physical units to be accounted for, unit materials cost, and total cost assignable to ending work in process (WIP) inventory. The final answers for EUP and costs are provided, confirming the calculations for materials and conversion costs.

Uploaded by

hamse mohamed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

Formula:

\text{EUP} = \text{Units completed and transferred out} + (\text{Ending WIP units} \times \
text{% completion})

iven Data:

 Units completed and transferred out = 20,000 units


 Ending WIP = 5,000 units, 60% complete
 Beginning inventory is not relevant for EUP unless specifically stated to include it.

Calculation:

EUP for materials and conversion=20,000+(5,000×0.60)\text{EUP for materials and


conversion} = 20,000 + (5,000 \times
0.60)EUP for materials and conversion=20,000+(5,000×0.60) EUP=20,000+3,000=23,000\
text{EUP} = 20,000 + 3,000 = 23,000EUP=20,000+3,000=23,000

Correct Answer:

(b) 23,000

To determine the physical units to be accounted for, we sum the units started into
production and any units in ending work in process (WIP).

Formula:

Physical units to be accounted for=Units started into production+Ending WIP units\


text{Physical units to be accounted for} = \text{Units started into production} + \text{Ending
WIP
units}Physical units to be accounted for=Units started into production+Ending WIP units

Given Data:

 Units started into production = 7,000


 Ending WIP = 500 units

Calculation:

Physical units to be accounted for=7,000+500=7,500\text{Physical units to be accounted for}


= 7,000 + 500 = 7,500Physical units to be accounted for=7,000+500=7,500

Correct Answer:

(c) 7,500
Materials:

 Materials are 100% complete for both beginning and ending WIP.
 Units completed and transferred out = 23,000
 Ending WIP = 3,000

EUP for materials=23,000+3,000=26,000\text{EUP for materials} = 23,000 + 3,000 =


26,000EUP for materials=23,000+3,000=26,000

Conversion Costs:

 Beginning WIP = 2,000 units, 20% complete

Equivalent units for beginning WIP conversion costs=2,000×(1−0.20)=2,000×0.80=1,600\


text{Equivalent units for beginning WIP conversion costs} = 2,000 \times (1 - 0.20) = 2,000 \
times 0.80 =
1,600Equivalent units for beginning WIP conversion costs=2,000×(1−0.20)=2,000×0.80=1,6
00

 Units completed and transferred out = 23,000 (includes the completed portion of
beginning WIP).
 Ending WIP = 3,000 units, 33 1/3% complete

Equivalent units for ending WIP conversion costs=3,000×13=1,000\text{Equivalent units for


ending WIP conversion costs} = 3,000 \times \frac{1}{3} =
1,000Equivalent units for ending WIP conversion costs=3,000×31=1,000
EUP for conversion costs=23,000+1,000=24,000\text{EUP for conversion costs} = 23,000 +
1,000 = 24,000EUP for conversion costs=23,000+1,000=24,000

Final Answer:

 Materials = 26,000
 Conversion costs = 24,000

Correct Answer: (c) 26,000, 24,000

o calculate the unit materials cost, we use the formula:

Unit materials cost=Total materials costEquivalent units for materials\text{Unit materials


cost} = \frac{\text{Total materials cost}}{\text{Equivalent units for
materials}}Unit materials cost=Equivalent units for materialsTotal materials cost
Given Data:

 Total materials cost = $60,000


 Units transferred out = 9,000
 Ending WIP = 3,000 units (fully complete as to materials)

Since materials are fully added, the equivalent units for materials include all transferred out
units and all ending WIP units:

Equivalent units for materials=9,000+3,000=12,000\text{Equivalent units for materials} =


9,000 + 3,000 = 12,000Equivalent units for materials=9,000+3,000=12,000

Calculation:

Unit materials cost=60,00012,000=5.00\text{Unit materials cost} = \frac{60,000}{12,000} =


5.00Unit materials cost=12,00060,000=5.00

Correct Answer:

(a) $5.00

To calculate the total cost assignable to the ending work in process (WIP) inventory, we
need to account for both materials costs and conversion costs.

Given Data:

 Materials cost per unit = $10


 Conversion cost per unit = $30
 Ending WIP units = 2,500
 Ending WIP completion = 40% complete as to conversion costs and fully complete
as to materials.

Step 1: Calculate materials cost:

Since materials are fully complete for all 2,500 units:

Materials cost=2,500×10=25,000\text{Materials cost} = 2,500 \times 10 =


25,000Materials cost=2,500×10=25,000

Step 2: Calculate conversion cost:


Conversion is 40% complete for 2,500 units:

Equivalent units for conversion=2,500×0.40=1,000\text{Equivalent units for conversion} =


2,500 \times 0.40 = 1,000Equivalent units for conversion=2,500×0.40=1,000
Conversion cost=1,000×30=30,000\text{Conversion cost} = 1,000 \times 30 =
30,000Conversion cost=1,000×30=30,000

Step 3: Total cost assignable to ending WIP:

Total cost=Materials cost+Conversion cost\text{Total cost} = \text{Materials cost} + \


text{Conversion cost}Total cost=Materials cost+Conversion cost
Total cost=25,000+30,000=55,000\text{Total cost} = 25,000 + 30,000 =
55,000Total cost=25,000+30,000=55,000

Correct Answer:

(b) $55,000

You might also like