Weatherly Lumber Company processes wood pulp for manufacturing various paper products. The company employs a process costing system for its manufacturing operations. All direct materials are added at the beginning of the process, and conversion costs are incurred uniformly throughout the process. This is the company's production schedule for May: Percent Completed Materials Conversion 100% 50% Work-in-Process Inventory, May 1 Started during May Units to account for Units from beginning Work-in-Process, which were completed and transferred out during May Started and completed during May Work-in-Process Inventory, May 31 Total units accounted for The following cost data are available: Work-in-Process Inventory, May 1 Direct materials Conversion Costs incurred during May Direct materials Conversion $ 73,690 23,494 188, 280 315,810 Tons of Pulp 5,000 12,000 17,000 5,000 7,200 4,800 17,000 100% 50% Required: 1. Calculate the equivalent units of direct materials and conversion during May. Use the FIFO method. 2. Calculate the cost per equivalent unit for both direct materials and conversion during May. Use the FIFO method.
Weatherly Lumber Company processes wood pulp for manufacturing various paper products. The company employs a process costing system for its manufacturing operations. All direct materials are added at the beginning of the process, and conversion costs are incurred uniformly throughout the process. This is the company's production schedule for May: Percent Completed Materials Conversion 100% 50% Work-in-Process Inventory, May 1 Started during May Units to account for Units from beginning Work-in-Process, which were completed and transferred out during May Started and completed during May Work-in-Process Inventory, May 31 Total units accounted for The following cost data are available: Work-in-Process Inventory, May 1 Direct materials Conversion Costs incurred during May Direct materials Conversion $ 73,690 23,494 188, 280 315,810 Tons of Pulp 5,000 12,000 17,000 5,000 7,200 4,800 17,000 100% 50% Required: 1. Calculate the equivalent units of direct materials and conversion during May. Use the FIFO method. 2. Calculate the cost per equivalent unit for both direct materials and conversion during May. Use the FIFO method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Required:
1. Calculate the equivalent units of direct materials and conversion during May. Use the FIFO method.
2. Calculate the cost per equivalent unit for both direct materials and conversion during May. Use the FIFO method.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Calculate the equivalent units of direct materials and conversion during May. Use the FIFO method.
Equivalent
Units
Direct Materials
Conversion
Required:
1. Calculate the equivalent units of direct materials and conversion during May. Use the FIFO method.
2. Calculate the cost per equivalent unit for both direct materials and conversion during May. Use the FIFO method.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
< Required 1
Direct Materials
Conversion
Calculate the cost per equivalent unit for both direct materials and conversion during May. Use the FIFO method. (Round your
answers to 2 decimal places.)
Costs per
Equivalent Unit
Required 2
< Required 1
Required 2 >
Transcribed Image Text:Weatherly Lumber Company processes wood pulp for manufacturing various paper products. The company employs a process costing
system for its manufacturing operations. All direct materials are added at the beginning of the process, and conversion costs are
incurred uniformly throughout the process. This is the company's production schedule for May:
Work-in-Process Inventory, May 1
Started during May
Units to account for
Units from beginning Work-in-Process, which
were completed and transferred out during May
Started and completed during May
Work-in-Process Inventory, May 31
Total units accounted for
The following cost data are available:
Work-in-Process Inventory, May 1
Direct materials
Conversion
Costs incurred during May
Direct materials
Conversion
$ 73,690
23,494
188, 280
315, 810
Percent Completed
Tons of
Pulp Materials Conversion
5,000 100%
50%
12,000
17,000
5,000
7,200
4,800
17,000
100%
50%
Required:
1. Calculate the equivalent units of direct materials and conversion during May. Use the FIFO method.
2. Calculate the cost per equivalent unit for both direct materials and conversion during May. Use the FIFO method.
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