Question

The Smelting Department of Polzin Company has the following production and cost data for September.

Production: Beginning work in process 2,000 units that are 100% complete as to materials and 20% complete as to conversion costs; units started and finished 9,000 units; and ending work in process 1,000 units that are 100% complete as to materials and 40% complete as to conversion costs.
Manufacturing costs: Work in process, September 1, $15,200; materials added $60,000; labor and overhead $132,000. Polzin uses the FIFO method to compute equivalent units.

Required:
Compute the equivalent units of production for (1) materials and (2) conversion costs for the month of September.

Answer 1

Answer and Explanation:

The computation of the equivalent units of products for material and conversion is as follows:

(1)

For material

= 9,000 units + 1,000 units

= 10,000 units

(2)

for conversion

= 2,000 units × (1 - 20%) + 9,000 units + 1,000 units + 1,000 units × 40%

= 1,600 units + 9,000 units + 400 units

= 11,000 units