Austin Co., manufactures a product called Aster in a three-process series. All m

Question

Austin Co., manufactures a product called Aster in a three-process series. All materials are introduced at the beginning of the first process. Austin uses the first-in, first-out method of inventory costing. Unit and cost data for the first process (Department A) for the month of December follow: Units Completion Work in process inventory: December December 31 12,000 5,000 14,000 60% 40% Started in December: 21,000 Completed in December Calculation equivalent units of production for materials and conversion costs for December.

Explanation / Answer

Weighted Average Cost: UNITS TO ACCOUNT FOR: Beginning Work in Process units 12,000 Add: Units Started in Process 14,000 Total Units to account for: 26,000 UNITS TO BE ACCOUNTED FOR: Units started and completed 21,000 Ending Work in Process 5,000 Total Units to be accounted for: 26,000 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units started and completed 100% 21,000 100% 21,000 Ending Work in Process 100% 5,000 40% 2,000 Total Equivalent units 26,000 23,000 FIFO method: UNITS TO ACCOUNT FOR: Beginning Work in Process units 12,000 Add: Units Started in Process 14,000 Total Units to account for: 26,000 UNITS TO BE ACCOUNTED FOR: Units completed from Beginning WIP 12000 Units started and completed 9,000 Ending Work in Process 5,000 Total Units to be accounted for: 26,000 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units completed from Beg. WIP 0% 0 40% 4,800 Units started and completed 100% 9,000 100% 9,000 Ending Work in Process 100% 5,000 40% 2,000 Total Equivalent units 14,000 15,800 Q2. Selling price : 45 Variable ccost per unit: 27 Fixed cost: 975,000 Actual sales 160,000 Contribution : Selling price-Variable cost = 45-27 = 18 CM ratio (Contribution/Sselling price*100) = 18/45*100 = 40% Income From Operations: Contribution earned (160000 units @18) 2880000 Less: Fixed cost 975000 Net icnome 1905000

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.