Principles of Managerial Accounting · free preview
Equivalent Units and Total Cost in the First Processing Stage
The first processing stage computes equivalent units for materials and conversion separately, divides each cost pool by its equivalent units to get unit costs, and assigns cost between units completed and units still in ending work in process.
1. The equivalent units idea
The equivalent units idea
2. The quantity schedule
The quantity schedule
3. Unit costs and assignment
Unit costs and assignment
4. Weighted average versus FIFO
Weighted average versus FIFO
5. Equivalent units definition
What are equivalent units? Use the figures from the worked example in this lesson and state the result in the requested units.
6. Conversion equivalent units
A department finishes 8,000 units and ends with 2,000 units 60 percent complete on conversion. Compute conversion equivalent units.
7. Materials unit cost
Materials cost is 20,000 dollars and materials equivalent units are 10,000. Compute the materials cost per equivalent unit.
8. Ending WIP assignment
Ending work in process holds 2,000 units fully complete on materials at 2.00 dollars and 1,200 conversion equivalent units at 3.00 dollars. Compute the ending work in process cost.
9. Completed units cost
Completed and transferred units number 8,000 at a combined unit cost of 5.00 dollars. Compute the cost transferred out in dollars, number only.
10. Reconciliation total
Cost transferred out is 40,000 dollars and ending work in process is 7,600 dollars. Compute the total cost to account for in dollars, number only.
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