Question

Nonuniform Inputs, Transferred-In Cost Drysdale Dairy produces a variety of dairy products. In Department 12, cream (transferred in from Department 6) and other materials (sugar and flavorings) are mixed at the beginning of the process and churned to make ice cream. The following data are for Department 12 for August: Production: Units in process, August 1, 25% complete* 40,000 Units completed and transferred out 120,000 Units in process, August 31, 60% complete* 30,000 * With respect to conversion costs. 1. Prepare a physical flow schedule for the month. Drysdale Dairy Physical Flow Schedule For the Month of August Units to account for: Units in beginning work in process Units started Total units accounted for Units accounted for: Units transferred out Units in ending work in process Total units accounted for 2. Using the weighted average method, calculate equivalent units for the following categories: transferred-in, materials, and conversion. Transferred-In equivalent units Materials equivalent units Conversion equivalent units

Answer 1

Total units accounted for 150,000

Transferred-In equivalent units 150,000

Materials equivalent units 150,000

Conversion equivalent units 138,000

Step-by-step explanation:

Production: Units in process,

August 1, 25% complete* 40,000

Units completed and transferred out 120,000

Units in process, August 31, 60% complete * 30,000 *

With respect to conversion costs.

Drysdale Dairy

Physical Flow

Schedule For the Month of August

Units to account for:

Units in beginning work in process 40,000

Units started 110,000

( Units completed + Ending Units in process- BWIP= 120,000+ 30,000- 40,000= 110,000)

Total units accounted for 150,000

Units accounted for:

Units transferred out 120,000

Units in ending work in process 30,000

Total units accounted for 150,000

Weighted Average Method Equivalent Units

Equivalent Units

Transferred-In Materials Conversion

Transferred Out 120,000 120,000 120,000

Add EWIP 30,000 30,000 18,000( 60% of 30,000)

Equivalent Units 150,00 150,000 138,000

Materials equivalent units 150,000

Conversion equivalent units 138,000

Weighted Average Method is used adding the ending work in process and the transferred out units.