EXERCISE 4-6 Equivalent Units of Production-Weighted-Average Method LO4-2 Highla

Question

EXERCISE 4-6 Equivalent Units of Production-Weighted-Average Method LO4-2 Highlands Company uses the weighted-average method in its process costing system. It processes wood pulp for various manufacturers of paper products. Data relating to tons of pulp processed during June are provided below: Percent Completed Labor and Overhead 80% 40% Tons of Pulp 20,000 30,000 0,000 Materials 90% 60% 19 Started into production during June .. Required pute the number of tons of pulp completed and transferred out during June mpute the equivalent units of production for materials and for labor and overhead for June.

Explanation / Answer

1) Calculate number of tons of pulp transferred out

2) Calculate Equivalent units of production with respect to materials and labor and overhead

Weighted­Average Method:

1) Calculate number of tons of pulp transferred out

Tons of Pulp Work in process, June 1 20,000 Started into production during the month 190,000 Total tons in process 210,000 Deduct work in process, June 30 30,000 Completed and transferred out during the month 180,000

2) Calculate Equivalent units of production with respect to materials and labor and overhead

Equivalent Units of Production Materials Labor and Overhead Units transferred out 180,000 180,000 Equivalent units in ending work in process inventory: Materials: 30000*60%complete 18,000 Labor and overhead: 30000*40% complete 12,000 Equivalent units of production 198,000 192,000

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