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Terrace Corporation makes an industrial cleaner in two sequential departments, Compounding and Drying. All material is added at the beginning of the process in the Compounding Department. Conversion costs are added evenly throughout each process. Terrace uses the weighted average method of process costing. In the Compounding Department, beginning work in process was 3,600 pounds (60% processed), 61,200 pounds were started, 57,600 pounds were transferred out, and ending work in process was 60% processed.
Calculate equivalent units for the Compounding Department for August 2016.
Terrace Corporation
Flow of Units and Equivalent Units Calculation, August 2016
Equivalent Units
% WorkConversion % Work done Direct Materials Done Costs
Complete/Transferred
Ending Inventory
Total

Sagot :

Tundexiidn

Answer:

                                    Terrace Corporation

                                       Equivalent Unit

                                                        %     D.Material      %    Conversion

Completed transferred  57,600 100%   57,600       100%    57,600

to drying

Ending Inventory of WIP 7,200   100%   7,200         60%      4,320

Total                               64,800             64,800                   61,920

Note:

Ending Inventory of Wip = Opening WIP Inventory + Added(Started) - Transferred out = 3,600 + 61,200 - 57,600 = 7,200 pounds

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