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L2 - Practice Problem-EUP-FIFO

1. The document provides examples of using the FIFO method to calculate equivalent units of production for labor and overhead for companies with beginning work-in-process inventory, units started and completed during a period, and ending work-in-process inventory. 2. It gives a multi-step process to (a) calculate total units to account for, (b) determine units started and completed, and (c) calculate equivalent units of production using FIFO. 3. An example is provided for a company with beginning WIP of 180,000 units, 3,400,000 units started this period, and ending WIP of 165,000 units. Using the FIFO method, equivalent units are calculated

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181 views3 pages

L2 - Practice Problem-EUP-FIFO

1. The document provides examples of using the FIFO method to calculate equivalent units of production for labor and overhead for companies with beginning work-in-process inventory, units started and completed during a period, and ending work-in-process inventory. 2. It gives a multi-step process to (a) calculate total units to account for, (b) determine units started and completed, and (c) calculate equivalent units of production using FIFO. 3. An example is provided for a company with beginning WIP of 180,000 units, 3,400,000 units started this period, and ending WIP of 165,000 units. Using the FIFO method, equivalent units are calculated

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lalalala
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We take content rights seriously. If you suspect this is your content, claim it here.
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L2- Practice Problem-EUP-FIFO

1. For each of the following situations, use the FIFO method to determine the equivalent units of
production for labor and overhead, assuming that they are same percentage of completion:
a. Beginning WIP Inventory (45% complete) 10,000
Units started in production 350,000
Units transferred out 344,000
Ending WIP Inventory (60% complete) 16,000
Physical % Conversion
  Units Complete Costs
Beginning, WIP Inventory 10,000    
Started 350,000    
Units to account for: 360,000    
     
Completed:      
Beginning, WIP 10,000 55% 5,500
Started 334,000 100% 334,000
Ending, WIP Inventory 16,000 60% 9,600
Units accounted for:   360,000   349,100

b. Beginning WIP Inventory (30% complete) 40,000


Units started in production 480,000
Units transferred out ?
Ending WIP Inventory (70% complete) 26,000
Physical % Conversion
  Units Complete Costs
Beginning, WIP Inventory 40,000    
Started 480,000    
Units to account for: 520,000    

Completed:      
Beginning, WIP 40,000 70% 28,000
Started 454,000 100% 454,000
Ending, WIP Inventory 26,000 70% 18,200
Units accounted for:   520,000   500,200
*Units transferred out= units accounted for - ending, WIP Inventory

c. Beginning WIP Inventory (55% complete) 15,000


Units started in production 405,000
Units transferred out 415,800
Ending WIP Inventory (90% complete) ?
Physical % Conversion
  Units Complete Costs
Beginning, WIP Inventory 15,000    
Started 405,000    
Units to account for: 420,000  
Completed:  
Beginning, WIP 15,000 45% 6,750
Started 400,800 100% 400,800
Ending, WIP Inventory 4,200 90% 3,780
Units accounted for:   420,000   411,330
*Ending, WIP Inventory=units accounted for - units transferred out

d. Beginning WIP Inventory (25% complete) 10,800


Units started in production ?
Units transferred out 351,600
Ending WIP Inventory (45% complete) 18,300
Physical % Conversion
  Units Complete Costs

Beginning, WIP Inventory 10,800    


Started   359,100    
Units to account for:   369,900    
     
Completed:      
Beginning, WIP   10,800 75% 8,100

Started   340,800 100% 340,800


Ending, WIP Inventory   18,300 45% 8,235
Units accounted for:   369,900   357,135
*Units started in production=units to account for - beginning, WIP Inventory

2.) a. Compute the total units to account for.  


Beginning, WIP Inventory       180,000
Started this period 3,400,000
Total units to account for:     3,580,000

b. Determine how many units were started and


completed.  
Completed:        
Beginning, WIP Inventory 180,000
Started 3,235,000
Ending, WIP Inventory 165,000
Total units accounted for:     3,580,000
Started and completed=3,235,000 units

c. Determine the equivalent units of production using the FIFO method.


Physical Conversion
Materials
      Units Costs
Beginning, WIP Inventory   180,000    

Started   3,400,000    
Units to account for:   3,580,000    
       
Completed:      
Beginning, WIP   180,000 0 63,000
3,235,00
Started   0 3,235,000 3,235,000
Ending, WIP Inventory   165,000 165,000 66,000
3,400,00
Units accounted for:   3,580,000 0 3,364,000

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