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Equivalent Units of Production: Average Cost Method The following information concerns production in the Finishing Department for...

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Accounting

Equivalent Units of Production: Average Cost Method

The following information concerns production in the FinishingDepartment for May. The Finishing Department uses the average costmethod.

ACCOUNT Work in Process—FinishingDepartmentACCOUNT NO.
DateItemDebitCreditBalance
DebitCredit
May1Bal., 25,100 units, 75% completed150,600
31Direct materials, 123,000 units450,180600,780
31Direct labor279,100879,880
31Factory overhead283,6001,163,480
31Goods transferred, 130,500 units1,119,69043,790
31Bal., ? units, 30% completed43,790

a. Determine the number of units in work inprocess inventory at the end of the month.
units

b. Determine the number of whole units to beaccounted for and to be assigned costs and the equivalent units ofproduction for May.

Whole unitsunits
Equivalent units of productionunits

Answer & Explanation Solved by verified expert
4.2 Ratings (883 Votes)

Requirement a

Units in ending Inventory = 17,600

Requirement b

Whole units 148,100 units
Equivalent units of production 135,780 units

Working

Reconciliation of Units
A Beginning WIP                   25,100
B Introduced                 123,000
C=A+B Units to account for                 148,100
D Transferred out                 130,500
E=C-D Ending WIP                   17,600

.

Units Complete % Equivalent units
Transferred out                  130,500 100%                  130,500
Ending WIP                    17,600 30%                       5,280
Total                  148,100 Total                  135,780

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