Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 19

Compute Equivalent Units

Bears, Inc., adds materials at the beginning of the process in Department MO. The following information on physical units for Department MO for the month of July is available:

Work in process, July 1 (75% complete with respect to conversion)	27,000
Started in July	180,000
Completed	180,000
Work in process, July 30 (60% complete with respect to conversion)	27,000

Required

a.Compute the equivalent units for materials costs and for conversion costs using the weighted-average method.

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b.Compute the equivalent units for materials costs and for conversion costs using the FIFO method.

Step 1 of 3

Equivalent units refer to quantity of incomplete units manufactured by the company that is expressed in terms of quantity of completed units. It is a term used to describe the work in progress units of production of the company which is also known as incomplete units of production.