Question

Holly Company has the following information for December 1 to December 31. All direct materials are 100% complete.

Beginning balance December 200 units, 20% complete for conversion $14,000
Completed 800 units and transferred to finished goods inventory $131,182
Direct materials 54,000
Direct labor 34,000
Factory overhead Property taxes 6,000
Depreciation 32,000
Utilities 18,000
Indirect labor 4,000
Ending balance December 31, 300 units, 40% complete 30,818

Required:
Calculate equivalent units using the weighted-average and FIFO methods.

Answer 1

Answer:

Weighted Average : Materials = 1,100 units, Conversion Costs = 920 units

FIFO : Materials = 1,100 units, Conversion Costs = 1,260 units

Explanation:

Weighted Average

Materials

Ending Work In Process (300 ×100 %)         =  300 units

Completed and Transferred (800 ×100 %)   = 800 units

Equivalent units in respect to materials       = 1,100 units

Conversion Costs

Ending Work In Process (300 ×40 %)                    =  120 units

Completed and Transferred (800 ×100 %)            = 800 units

Equivalent units in respect to conversion costs   = 920 units

FIFO

Materials

To finish  Opening Work in Process (200 × 0%)    = 0 units

Started and Completed (800 × 100%)                    = 800 units

Ending Work in Process (300 × 100%)                   = 300 units

Equivalent units in respect to materials                =1,100 units

Conversion Costs

To finish  Opening Work in Process (200 × 80%)    = 160 units

Started and Completed (800 × 100%)                       = 800 units

Ending Work in Process (300 × 40%)                        = 300 units

Equivalent units in respect to materials                    =1,260 units