Levittown Company employs a process cost system for its manufacturing operations

Question

Levittown Company employs a process cost system for its manufacturing operations. All direct materials are added at the beginning of the process and conversion costs are added proportionately. Levittown's production quantity schedule for November is reproduced in the next column. Work-in-process November 1 (60% completed as to conversion costs) =1,000 Units started during November=5,000 Total units to account for= 6,000 Units completed and transferred out from beginning inventory=1,000 Units started and completed during November= 3,000 Work-in-process on November 30 (20% complete as to conversion costs) = 2,000 Total units to be accounted for= 6,000 1. Using the FIFO method, Levittown's equivalent units for conversion costs for November are? 2. Using the FIFO method, Levittown's equivalent units for direct materials for November are? 3. Using the Weighted- Average method, Levittown's equivalent units for direct materials for November are? 4. Using the Weighted-Average method, Levittown's equivalent units for conversions costa for November are?

Explanation / Answer

1. Under FIFO Method Equivalent units of Conversion cost for November Particulars Units Equilent Units Work in Process November - 1 (60% completed as to conversion cost) 1000 600 Started during the year 5000 5000 Equilent Units for Conversion cost 5600 2. Under FIFO Method Equivalent units of Direct material for November Particulars Units Equilent Units Beginning Inventory 1000 Completed during the November 3000 Work in Process November - 30 (20% completed as to conversion cost) 2000 400 Equilent Units for Direct Materal 4400 3. Under Weighted Average Method Equivalent units of Conversion cost for November Particulars Units Weight Equilent Units Work in Process November - 1 (60% completed as to conversion cost) 1000 1 600 Started during the year 5000 2 10000 Equilent Units for Conversion cost 5300 (Average of the above units) 4. Under Weighted Average Method Equivalent units of Direct material for November Particulars Units Weight Equilent Units Beginning Inventory 1000 1 1000 Completed during the November 3000 2 6000 Work in Process November - 30 (20% completed as to conversion cost) 2000 3 1200 Equilent Units for Material Units 2733

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