Pierce & Company provides the following information concerning the work in proce
ID: 2408337 • Letter: P
Question
Pierce & Company provides the following information concerning the work in process at its plant . Beginning inventory was partially complete (materials are 100 percent complete; conversion costs are 62 percent complete). Started this month, 60,400 units. Transferred out, 50,300 units. Ending inventory, 19,900 units (materials are 100 percent complete, conversion costs are 17 percent complete). Required: the equivalent units for materials using F quivalent units b. Compute the equivalent units for conversion costs using FIFO quivalent unitsExplanation / Answer
Answer
Beginning Inventory + 60400 – 50300 = 19900
Beginning Inventory = 19900 + 50300 – 60400
Beginning Inventory = 9800 units
Units
Complete status: Material
Complete status: Conversion Cost
Beginning Inventory
9800
100%
62%
Introduced
60400
Total
70200
Transferred
50300
100%
100%
Closing WIP
19900
100%
17%
Units transferred 50300, out of which 9800 from beginning inventory and 40500 from introduced during month (FIFO)
Equivalent Units (EU)
Total Units
Material
% completed in Current period
EU
Opening
9800
0%
Ending
19900
100%
19900
Introduced and completed
40500
100%
40500
TOTAL Equivalent Units
60400
Hence, answer is 60,400 units = Equivalent Units for material
Equivalent Units
Total Units
Conversion cost
% completed in Current period
EU
Opening
9800
38% [100% - 62% already completed in last month]
3724
Ending
19900
17%
3383
Introduced and completed
40500
100%
40500
TOTAL Equivalent Units
47607
Hence, answer is 47,607 units = Equivalent Units for Conversion Cost
Units
Complete status: Material
Complete status: Conversion Cost
Beginning Inventory
9800
100%
62%
Introduced
60400
Total
70200
Transferred
50300
100%
100%
Closing WIP
19900
100%
17%