Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 31

Equivalent Units; Weighted-Average and FIFO Methods Industrial Chemical Company refines a variety of petrochemical products. These data are from the firm’s Houston plant:

Work-in-process inventory, September 1	4,000,000 gallons
Direct materials	100 percent completed
Conversion	25 percent completed
Units started in process during September	4,850,000 gallons
Work-in-process inventory, September 30	2,400,000 gallons
Direct materials	100 percent completed
Conversion	60 percent completed

Required Compute the equivalent units of direct material and conversion for the month of September. Use both the weighted-average and the FIFO methods.