Question

Ferris Corporation makes a powdered rug shampoo in two sequential departments, Compounding and Drying. Materials are added at the beginning of the process in the Compounding Department. Conversion costs are added evenly throughout each process. Ferris uses the weighted average method of process costing. In the Compounding Department, beginning work in process was 8,000 pounds (70% processed), 74,000 pounds were started in process, 72,000 pounds transferred out, and ending work in process was 50% processed.

Calculate equivalent units for March 2016 for the Compounding Department.

Answer 1

Ending WIP (50% completed to conversion) = Beginning work in process + Units started - Units completed

= 8000 + 74000 - 72000

= 10,000 units

Equivalent units for March 2016 for the Compounding Department

Material Conversion

Units completed and transferred out 72,000 72,000

Units in ending work in process 10,000 5,000 (50%complete)

Equivalent units 82,000 units 77,000 units