Purchase Solution

Equivalent Units for Direct Materials and Conversion Costs

Not what you're looking for?

Ask Custom Question

Spunky Corporation uses a process costing system. All direct materials are added at the beginning of the process. Spunky's production quantity schedule for May is reproduced below:

Units
Work in Process on May 1 (conversion 60% complete)............... 1,000
Units started during production........................................................5,000
Total units to account for..................................................................6,000

Units completed and transferred out from beginning inventory...... 1,000
Units started and completed during May..........................................3,000
Work-in-process on May 30 (conversion 20% complete).................2,000
Total units accounted for.................................................................6,000

1. Using the FIFO method, the equivalent units for direct materials for May are:

A) 5,000 Units

B) 6,000 Units

C) 4,400 Units

D) 3,800 Units

2. Using the weighted-average method, the equivalent units for direct materials for May are:

A) 3,400 Units

B) 4,400 Units

C) 5,000 Units

D) 6,000 Units

3. Using the FIFO Method, the equivalent units for conversion costs for May are:

A) 3,400 Units

B) 3,800 Units

C) 4,000 Units

D) 4,400 Units

4. Using the weighted-average method, the equivalent units for conversion costs for May are:

A) 3,400 Units

B) 3,800 Units

C) 4,000 Units

D) 4,400 Units

Purchase this Solution

Solution Summary

The solution explains how to calculate the equivalent units under FIFO method and weighted average method

Solution Preview

1. The equivalent units for material are
Units transferred from started and completed = 3,000 X 100% = 3,000 units
Units in ending WIP = 2,000 X 100% = 2,000 units
Total = 5,000 units
Since material is added at the beginning of the period, ...

Purchase this Solution


Free BrainMass Quizzes
Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Introduction to Finance

This quiz test introductory finance topics.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.