Question

onlon Chemicals manufactures paint thinner. Information on the work in process follows: Beginning inventory, 30,000 partially complete gallons. Transferred out, 157,500 gallons. Ending inventory (materials are 10 percent complete; conversion costs are 20 percent complete). Started this month, 180,000 gallons. Required: a. Compute the equivalent units for materials using the weighted-average method. b. Compute the equivalent units for conversion costs using the weighted-average method.

Answer 1

The equivalent units for conversion costs using the weighted-average method are 168,000

The equivalent units for materials using the weighted-average method are 162,750

Step-by-step explanation:

onlon Chemicals

Equivalent units can be calculated by the following

Particulars Units % of Completion Equivalent Units

Mat. Con. Costs Materials C. Costs

Transferred out, 157,500 100 100 157,500 157,500

Ending inventory, 52,500 10 20 5250 10,500

Total Equivalent Units 162,750 168,000

Working

Ending Inventory= Opening + Started - Transferred Out

Ending Inventory=30,000 +180,000 -157,500 = 52,500 gallons

The equivalent units are calculated by two ways either by adding ending inventory and transferred out units or by adding beginning inventory with units started.

Answer 2

a. 162,750 gallons

b. 168,000 gallons

Step-by-step explanation:

Step 1 Determine the Units of Closing Work In Process Inventory

Units of Closing Work In Process = Beginning inventory units + units Started this month - units Transferred out

= 30,000+180,000-157,500

= 52,500

Step 2 Determine the equivalent units for materials

Note : materials are 10 percent complete in Units of Closing Work In Process

Units of Closing Work In Process ( 52,500 ×10%) = 5,250

Units Transferred out ( 157,500 ×100%) =157,500

Total =162,750

Step 3 Determine the equivalent units for conversion costs

Note : conversion costs are 20 percent complete in Units of Closing Work In Process

Units of Closing Work In Process ( 52,500 ×20%) = 10,500

Units Transferred out ( 157,500 ×100%) =157,500

Total =168,000