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Question 6 Computing Equivalent Units For each of the Case below and using the worksheet shown in Appendix 1, (a) Using the weighted average method of process costing, i. Show the physical flow of units ii. Compute the equivalent units (b) Using the FIFO method of process costing, i. Show the physical flow of units ii. Compute the equivalent units Case 1 Tuas Ltd is a manufacturer of solar panels. In November 2014, there were no beginning inventory and 55,000 units were started. The numbers of units in process at the end of the month were 10,000 units and were 60% converted and 100% completed as to direct materials. Case 2 Klean Ltd produces a liquid cleaners for floor. At the beginning of October, 40,000 litres of liquid cleaner were in process, 100% completed as to raw materials and 60% completed in terms of conversion costs. During the month, 420,000 litres were started. At the end of the month, 50,000 litres of liquid cleaner were in work in process inventory, 100% completed as to raw materials and 40% completed in terms of conversion costs. Case 3 Cheese Please Ltd produces cheese topping for the fast pizza industry. At the beginning of April, 60,000 kg of cheese topping was in process, 70% complete as to raw materials and 50% complete as to conversion costs. During the month, 320,000 kg of cheese topping were started. At the end of the month, 80,000 kg of cheese topping were in work in process inventory, 80% completed as to raw materials and 40% completed in terms of conversion costs. Appendix 1 For Weighted Average Method Equivalent units DM Physical flow (a) (b) (C) = (a) + (b) (d) (e) = (c)-(d) (a) = (d) +(e) Opening WIP Add units started Units to account for Units completed/transferred Closing WIP Units accounted for % completion in closing WIP For FIFO Method Equivalent units DM CC Physical flow % completion in opening WIP Work done on open WIP last period Work done this period (f) - (g) Work done this period ALL SHADED BOXES ARE TO BE LEFT BLANK

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