During March, the production department of a process manufacturing system comple

Question

During March, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of the units transferred, 28,000 were in process at the beginning of March and 180,000 were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 62% complete with respect to labor. At the end of March, 37,000 additional units were in process in the production department and were 100% complete with respect to materials and 37% complete with respect to labor. Compute the number of equivalent units with respect to both materials and direct labor respectively for March using the FIFO method.

During March, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of the units transferred, 28,000 were in process at the beginning of March and 180,000 were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 62% complete with respect to labor. At the end of March, 37,000 additional units were in process in the production department and were 100% complete with respect to materials and 37% complete with respect to labor. Compute the number of equivalent units with respect to both materials and direct labor respectively for March using the FIFO method.

Explanation / Answer

Step 1 - Summarize the flow of physical units, regardless of their stage of completion.

Beginning Balance - 30,000
Transferred toFG- (150,000)
Ending Balance - 41,000
Therefore UNITS ADDED to production was 161,000

BB + Units Added = 191,000 to be accounted for, and
Units Transferredto FG + EB = 191,000

Step 2 - Compute equivalent units produced.

Units transferred to FG - 150,000 (150,000 DM & 150,000 DL)
Ending Balance - 41,000 (80% DM = 32,800) (30% DL = 12,300)
Equivalent unitsof production = 182,800 DM & 162,300 DL

Since Cost data was not given, weighted average cost cannot be determined

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